Elizabeth Warren asks the Fed to release its March 2020 ethics warning about trading.

Ms. Warren, a Democratic Senator from Massachusetts, asked the Federal Reserve’s Board of Governors to release an email sent to reserve banks.,

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Elizabeth Warren asks the Fed to release its March 2020 ethics warning about trading.

Senator Elizabeth Warren requested that the Federal Reserve release an email sent to officials.
Senator Elizabeth Warren requested that the Federal Reserve release an email sent to officials.Credit…Stefani Reynolds for The New York Times
  • Oct. 21, 2021Updated 1:24 p.m. ET

Senator Elizabeth Warren, Democrat of Massachusetts, asked Jerome H. Powell, the Federal Reserve chair, on Thursday to release an email the central bank’s ethics office sent in March 2020 suggesting that officials might want to avoid unnecessary trading as they unrolled a sweeping market rescue.

The email, the existence of which was first reported by The New York Times earlier Thursday, was sent to regional bank ethics officers from the Fed Board of Governor’s ethics office on March 23, as the Fed announced a far-reaching market relief program, according to a person who saw it. It suggested that people with access to sensitive Fed information might want to stop unnecessary trading for a few months.

Officials seem to have heeded the warning and halted active financial activity in late March and April, based on disclosures and statements from central bank press officers. But the fact that some officials resumed trading in and after May 2020 has helped to fuel an ethics dilemma for the central bank.

Two regional Fed presidents ultimately resigned after disclosures of trades of stock and real estate securities from last year spurred criticisms of the central bank’s ethics rules and practices. Questions have also been raised about index fund trades made by Richard H. Clarida, the Fed’s vice chair, in February, before the email was sent, and by Mr. Powell in October, long after the Fed’s market interventions had been unveiled and implemented.

Mr. Powell has ordered a revamp of the Fed’s ethics rules and has asked for an investigation by an independent watchdog. Ethics and Fed scholars have suggested his and Mr. Clarida’s trades were less questionable than the ones happening at regional central bank branches. Even so, the fallout has become a potentially potent political weapon for some progressives who would prefer that the White House does not reappoint Mr. Powell when his term expires early next year.

Ms. Warren previously had stated her opposition to keeping Mr. Powell in his role based on his track record with financial regulation, at one point calling him a “dangerous man” to have at the Fed.

“The Fed has not released this email or any other ethics advice given to Fed officials during the time period when it was heavily involved in financial markets in response to the Covid-19 pandemic,” Ms. Warren wrote in the letter Thursday.

“I am writing to ask that you release this information immediately, so that Congress and the public can evaluate the extent to which Fed officials may have known of the risks from their trading, and if they ignored calls by ethics officials to avoid this scandalous behavior,” she continued.

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