The Federal Reserve’s Raphael Bostic, according to the Fed IG, violated the Fed’s trading rules and acted on confidential information, creating a conflict of interest

Atlanta Federal Reserve President Raphael Bostic violated U.S. central bank policies regarding trading and investments, according to the Fed's internal watchdog, although it noted he did not trade using confidential information. The report from the Office of Inspector General (OIG) stated that Bostic's actions created "the appearance of acting on confidential FOMC information" during the blackout period and "an appearance of a conflict of interest" that could cause reasonable doubt about his impartiality under the Atlanta Fed's code of conduct.

In response to the report, the Atlanta Fed issued a statement saying it takes these matters seriously, and its full board will meet to discuss the findings in detail. A spokesperson for the Federal Reserve Board of Governors also confirmed they are reviewing the report.

The investigation into Bostic’s finances is the third and likely final report examining the trading activities of current and former Fed policymakers. Documents released in September 2021 revealed that the presidents of the Dallas and Boston regional Fed banks, Robert Kaplan and Eric Rosengren, had actively traded in markets while contributing to monetary policy decisions. Both resigned shortly after the disclosures.

Fed Chair Jerome Powell and then-Vice Chair Richard Clarida were also scrutinized for their trading activities but were later cleared of any wrongdoing. Earlier this year, the OIG reported that Kaplan and Rosengren did not violate any rules in place at the time, though their trades raised concerns about conflicts of interest.

Bostic had already acknowledged multiple errors in his financial disclosures. The broader trading controversy damaged the Fed's reputation, raising suspicions about whether officials could profit from their policy decisions. In response, the Fed tightened its investment rules in late 2021, formalizing the changes in early 2022.

The OIG’s independence has been questioned by some members of Congress, as the inspector general is appointed by the Fed chair. However, in May 2023, the OIG stated that Fed leadership had never interfered with its investigations.