When he’s not steering monetary policy for the largest economy on Earth, Federal Reserve Chairman Jerome Powell likes tax free income for his own portfolio.

In January, he bought $50,001 to $100,000 of Massachusetts munis as well as Florida muni bonds valued in the same range.

Powell’s transactions are among the regulatory disclosures he’s required to make to the U.S. Office of Government Ethics. Rules call for ranges, not specific values, to be reported.

The disclosures also show Powell sold $15,001 to $50,000 of Maryland munis in January, and $50,001 to $100,000 of Connecticut munis in February.

The reported transactions are just part of Powell’s holdings. He holds nine funds, valued between $1 million and $5 million each, as of the end of 2017, records showed.

Powell and Munis

The Fed, according to Barron’s, said the trades in Powell’s account were made by a third party that “has been authorized, within broad categories of assets, to make trades without prior consultation.”

Powell and munis, and others

It’s not surprising Powell is among those investing in the $3.8 trillion municipal bond market. Households own about $1.57 trillion of individual municipal bonds, according to the Municipal Securities Rulemaking Board.

And ownership is bipartisan.

As we’ve noted (“Presidential Hopefuls Agree on Munis,” “Bonds Make for Strange Political Bedfellows”), high-profile investors, including political leaders from both parties, are attracted to municipal bonds.

The steady, predictable stream of tax-free income seems to bring people together.

James A. Klotz is the President of FMSbonds, Inc. Email the Author 04/30/2019