Kugler Resigned After Violating Trading Rules

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00:00Tell us a little bit more about the disclosures that we got now about Adriana Kugler and exactly

00:05what kind of issues came up. Yeah, so these disclosures show that she had made some improper

00:11trades. There are strict ethics rules that Fed officials must adhere to, and that includes not

00:17holding certain individual stocks and not making periods during what they call the blackout period,

00:21you know, right before and right after a Federal Reserve board meeting. It showed that she was in

00:26violation of that. She went to Jay Powell and asked for a waiver to basically reverse those trades,

00:31sell those holdings. Powell denied that, and so she instead then resigned her post about six months

00:37early. You know, this was a period back in the summer and in early August when there was a lot

00:41of focus on the Fed. Trump had really ramped up his rhetoric, and this was also just a couple days

00:45before Trump actually went to the Fed to tour the renovation, which has been at the center of his

00:49criticism of the Federal Reserve. And this wasn't the first time that Kugler had run afoul of these

00:54rules. There was an incident before that, right? Yes, she, you know, in prior years earlier in her

01:00term also had a similar situation in which she was able to obtain that waiver and wasn't held in any

01:07sort of wrongdoing following that. This was her husband was involved in that. He works in finance

01:12and was making trade. She said that was without her knowledge. I'll also note this is not the first

01:16time a Fed governor has run into this. There's been other Fed officials in recent years who have also

01:21made trade and had to resign early from their terms. So this is really, you know, called particularly

01:26from the Hill. Senator Elizabeth Warren has stepped up her remarks saying that there needs to be more

01:31guardrails and more, you know, rules surrounding Fed officials so that they're not able to financially

01:35gain from any sort of information they have that the public does not. Okay, so Elizabeth Warren has

01:40called for more oversight. What has the Fed said about this in terms of what steps they're taking on their

01:45own? So the Fed has said that there's an internal investigation going on and they're not going to

01:49comment while that is still in process. But what we know is that, you know, that Powell here really

01:54drew a pretty hard line and he, you know, would not allow her to get this waiver. You know, this

01:58really shows sort of the moment that the Fed is in while there's a lot of pressure from the

02:03administration and, you know, from, you know, the Republican Party to be more transparent and, you

02:09know, that Trump is really trying to bend the Fed to his will. You know, this resulted in Trump

02:14actually getting a pick who is much more favorable to Trump's views on the economy and interest

02:18rate Stephen Myron to join the Fed board. He joined earlier this year and will have fill

02:22out the rest of Kugler's term, which ends in January. I mean, given that Fed chair Jay Powell's

02:28term ends in May, I'm guessing that this will put the spotlight on whoever is nominated as a

02:34candidate to replace him even more. People are going to be going through their personal trading

02:38records as well. Yes, this is, you know, going to be a big issue. You know, Trump is in the

02:43process right now of sort of deciding who that next Fed chair will be. You know, he says

02:48Scott Besson, who's leading the search, says he's limited it down to five candidates, you

02:52know, including a White House economic adviser, Kevin Hassett, Kevin Warsh, who's a former

02:56Fed official, Chris Waller, who's currently at the Fed, Michelle Bowman, who's also at the

03:00Fed. So many of these folks already are currently having to disclose their financial holdings.

03:04But you have to imagine that they're all giving it an extra scrub to make sure that they are

03:07100 percent within the bounds of the rules here.