Fed Chair Powell Had 4 Private Phone Calls with BlackRock’s CEO Since March as BlackRock Manages Upwards of $25 Million of Powell’s Personal Money and Lands 3 No-Bid Deals with the Fed

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via wallstreetonparade:

Earlier this year, Wall Street On Parade reported that the Chairman of the Federal Reserve, Jerome Powell, had an upward range of $11.6 million invested with the investment management firm, BlackRock, and its iShares Exchange Traded Funds, according to Powell’s 2019 financial disclosure form.

Powell’s 2020 financial disclosure form is now available. It was signed by Powell on May 15, 2020 and it shows that Powell’s holdings in BlackRock investments have reached an upward range of $24.95 million – an increase of $13.35 million over the prior year’s upward range. (See Editor’s note below.)

The date that Powell signed his latest financial disclosure, May 15, is noteworthy. It means that more than 45 days after the New York Fed had hired BlackRock to manage its commercial mortgage-backed securities program and its $750 billion primary and secondary purchases of corporate bonds and ETFs in no-bid contracts, Fed Chairman Powell saw no reason to avoid the conflict of interest of allowing BlackRock to continue managing upwards of $25 million of his own personal money.

According to a statement released by the New York Fed, BlackRock was retained on March 24 to manage the $750 billion corporate bond buying programs for the Fed. The commercial mortgage-backed securities contract was entered into with BlackRock on March 25. The contract includes this language:

“…the Manager is hereby appointed as the FRBNY’s [Federal Reserve Bank of New York] agent in fact, and it shall have full power and authority to act on behalf of the Account with respect to the purchase, sale, exchange, conversion, or other transactions in any and all stocks, bonds, other securities, or cash held for investment subject to the Agreement…

“The Manager shall initially meet at least weekly with the FRBNY and any other investment managers participating in this FOMC directive to discuss strategy. Absent agreement from the FRBNY, these meetings should be attended only by individuals at the Manager who are behind the ethical wall established by the Manager…

“The Manager acknowledges that all information and material that comes into the possession or knowledge of the Manager on or after March 22, 2020…including the identity and amount of the assets held in the Account…shall be considered to be confidential and proprietary…providing the FRBNY, at the expense of the FRBNY, with all reasonable assistance in resisting or limiting disclosure.”

The ethical wall between the New York Fed and BlackRock would have no reason to include the Chairman of the Federal Reserve Board of Governors in Washington, D.C. Despite that, Powell has conducted four confidential phone calls with BlackRock’s CEO, Larry Fink, since March, lasting a total of 90 minutes. The first call on March 19 lasted 30 minutes; there were two calls in April, one on April 3 and one on April 9, both lasting 15 minutes. May is the last month of Powell’s calendar that is currently available. It shows a call between Powell and Fink on May 13 lasting 30 minutes.



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