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Gary Gensler reviews accomplishments, was ‘proud to serve’ as SEC chair

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U.S. Securities and Exchange Commission Chair Gary Gensler testifies before a House Financial Services Committee oversight hearing on Capitol Hill in Washington, D.C., on Sept. 27, 2023.

Jonathan Ernst | Reuters

Securities and Exchange Commission Chairman Gary Gensler spoke this morning at the Practising Law Institute’s 56th annual conference on securities regulation. 

It sounded awfully close to a farewell speech. 

“It’s a remarkable agency,” Gensler said of the SEC, which he has led since April, 2021.

“It’s been a great honor to serve with them, doing the people’s work, and ensuring that our capital markets remain the best in the world.” 

Gensler reviews accomplishments 

Gensle offered a review of what he has accomplished.  

Most notably, Gensler highlighted the many disclosure rules the SEC has enacted, including disclosure on data breaches, executive pay versus performance and additional disclosures on those seeking to control and buy more than a 5% stake in a company. 

Gensler made only passing reference to his most controversial disclosure rule, on climate change, which has been challenged in court. 

“Congress put in place important provisions about disclosure because information about securities creates a public good,” he said. 

On market structure, Gensler noted he had put in place new rules on central clearing of Treasuries and shortening of the settlement cycle for stocks from two days to one day, and had recently passed rules that allow stocks to be quoted in increments of less than a penny. 

Defense of crypto stance 

Gensler offered a full-throated defense of his approach to crypto. 

Gensler repeated his assertion that while he bitcoin is not a security, the SEC’s focus ” has been on some of the 10,000 or so other digital assets, many of which courts have ruled were offered or sold as securities” and are therefore subject to the SEC’s purview. 

He again asserted anyone offering to sell securities needs to register, and that intermediaries such as broker-dealers, exchanges and clearinghouses also need to be registered. 

He said that the failure to properly police the crypto industry had resulted in “significant investor harm” and that “the vast majority of crypto assets have yet to prove out sustainable use cases.” 

Proud to serve 

Gensler did not say he was resigning, but the tone was clear.

“I’ve been proud to serve with my colleagues at the SEC who, day in and day out, work to protect American families on the highways of finance,” he said at the end of his speech.

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Finance

Powell says the Fed doesn’t need to be ‘in a hurry’ to reduce interest rates

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Jerome Powell: Fed doesn’t need to be ‘in a hurry’ to reduce interest rates

Federal Reserve Chairman Jerome Powell said Thursday that strong U.S. economic growth will allow policymakers to take their time in deciding how far and how fast to lower interest rates.

“The economy is not sending any signals that we need to be in a hurry to lower rates,” Powell said in remarks for a speech to business leaders in Dallas. “The strength we are currently seeing in the economy gives us the ability to approach our decisions carefully.”

(Watch Powell’s remarkets live here.)

In an upbeat assessment of current conditions, the central bank leader called domestic growth “by far the best of any major economy in the world.”

Specifically, he said the labor market is holding up well despite disappointing job growth in October largely that he attributed to storm damage in the Southeast and labor strikes. Nonfarm payrolls increased by just 12,000 for the period.

Powell noted that the unemployment rate has been rising but has flattened out in recent months and remains low by historical standards.

On the question of inflation, he cited progress that has been “broad based,” noting that Fed officials expect it to continue to drift back towards the central bank’s 2% goal. Inflation data this week, though, showed a slight uptick in both consumer and producer prices, with 12-month rates pulling further away from the Fed mandate.

Still, Powell said the two indexes are indicating inflation by the Fed’s preferred measure at 2.3% in October, or 2.8% excluding food and energy.

“Inflation is running much closer to our 2 percent longer-run goal, but it is not there yet. We are committed to finishing the job,” said Powell, who noted that getting there could be “on a sometimes-bumpy path.”

The remarks come a week after the Federal Open Market Committee lowered the central bank’s benchmark borrowing rate by a quarter percentage point, pushing it down into a range between 4.5%-4.75%. That followed a half-point cut in September.

Powell has called the moves a recalibration of monetary policy that no longer needs to be focused primarily on stomping out inflation and now has a balanced aim at sustaining the labor market as well. Markets largely expect the Fed to continue with another quarter-point cut in December and then a few more in 2025.

However, Powell was noncommittal when it came to providing his own forecast. The Fed is seeking to guide its key rate down to a neutral setting that neither boosts nor inhibits growth, but is not sure what the end point will be.

“We are confident that with an appropriate recalibration of our policy stance, strength in the economy and the labor market can be maintained, with inflation moving sustainably down to 2 percent,” he said. “We are moving policy over time to a more neutral setting. But the path for getting there is not preset.”

The Fed also has been allowing proceeds from its bond holdings to roll off its mammoth balance sheet each month. There have been no indications of when that process might end.

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Watch Fed Chair Powell speak live to business leaders in the Dallas area

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[The stream is slated to start at 3 p.m. ET. Please refresh the page if you do not see a player above at that time.]

Federal Reserve Chair Jerome Powell speaks Thursday to business leaders in the Dallas-Forth Worth area on monetary policy. Powell is delivering a speech followed by a question and answer session.

The appearance comes one week after policymakers again voted to lower their key interest rate by a quarter percentage point, or 25 basis points. That followed a half-point cut in September and left the federal funds rate in a range between 4.5%-4.75%.

Economic readings this week, though, showed that inflation has proven sticky, with consumer price inflation at 2.6% and prices at the wholesale level at 2.4%. The measures are considerably higher for core inflation, which excludes food and energy costs.

Markets expect the Fed to cut again in December then likely skip the January meeting as officials assess the impact of the policy easing moves so far.

Read more:
Annual inflation rate hit 2.6% in October, meeting expectations

Powell and the Fed won’t be able to avoid talking about Trump forever
Here’s why inflation may look like it’s easing but is still a huge problem

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Stocks making the biggest moves midday: TPR, CPRI, DIS

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