After weekend scandal at the Fed, Congress will look at its own stock trading in the days ahead

News broke Saturday that former Federal Reserve governor Adriana Kugler violated the central bank’s ethics rules around stock trading, pushing the issue of Washington’s leaders playing the market back up the political agenda.

The House Administration Committee has a hearing scheduled for Wednesday morning to formally debate the overlapping issue of banning lawmaker stock trading for the first time in years. The hearing, titled “Taking Stock of the STOCK Act,” is to consider strengthening current limits on lawmaker trading, which allow for trades as long as they comply with insider trading laws and are disclosed within 30 days.

Those lawmaker restrictions have been criticized for years as insufficient, especially as a series of scandals — from senators trading during the COVID-19 pandemic to increased trading activity seen this year around tariff announcements — has created the appearance of impropriety or worse.

The latest financial disclosures of Kugler, who abruptly resigned from the Fed board in August, showed previously undisclosed stock trading in 2024, including during the Fed’s so-called blackout period, which is in violation of the agency’s ethics rules — yet another example likely to further harden public opinion around the issue.

The House committee is expected to focus solely on banning lawmakers from trading stocks, not a wider array of officials across Washington. Attempts to ban the activity have been mounting for years but have stalled out repeatedly.

The hearing this week will feature the Taxpayers Protection Alliance’s Dan Savickas and the Manhattan Institute’s James Copland as witnesses.

Savickas has already made his position clear, reposting a social media missive from his organization that read, “It’s about time lawmakers finally did something about it.”

At the center of the action on Wednesday will be House Administration Committee Chair Bryan Steil, a Wisconsin Republican.

Steil has said he will focus the hearing to make sure “no member of Congress should be profiting off of insider information” and that the panel will consider various options.

Insider trading by members of Congress is already illegal. A spokesperson for Steil didn’t immediately respond to a request for comment on whether he would favor ending the practice entirely via a ban, as he appears to have stopped short of making that call in recent years.

Meanwhile, an array of other lawmakers are very much calling for a ban.

One measure being pushed by a bipartisan group is called the Restore Trust in Congress Act, which would implement a ban on members of Congress, their spouses, their dependent children, and their trustees from owning, buying, or selling individual stocks, securities, commodities, or futures.

The bill is being led by a Republican — Rep. Chip Roy of Texas — and a Democrat — Rep. Seth Magaziner of Rhode Island — and was unveiled in September with a cross-section of supporters.

Other lawmakers have expressed wariness that a ban is the right approach, but polls indicate overwhelming public support. One survey this summer from the University of Maryland’s School of Public Policy found that 86% of Americans back a ban.

And public opinion has only appeared to harden after a series of reports this year highlighted an elevated number of stock transactions by Congress members around tariff-fueled market fluctuations earlier this year. In particular, when markets plunged in the wake of President Trump’s “Liberation Day” tariffs announcement in April, some lawmakers and their families made hundreds of stock trades — positioning themselves to benefit when the market rebounded.

One of the strongest supporters for a ban is Rep. Anna Paulina Luna, a Florida Republican who has said she’ll force a full House vote on the Restore Trust in Congress Act. She has said she will act through what is called a discharge petition, which bypasses leadership, if the bill isn’t considered.

Luna celebrated the news last week that the issue would get a committee hearing. Still, a source familiar with the congresswoman’s thinking told Yahoo Finance that she is not taking the discharge petition option off the table.

That will depend on how things go in the days ahead.

Ben Werschkul is a Washington correspondent for Yahoo Finance.

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