Fed Vice Chair Clarida to step down early following scrutiny over his trades during pandemic

Fed Vice Chair Clarida to step down early following scrutiny over his trades during pandemic

Federal Reserve Vice Chairman Richard Clarida said Monday he will be leaving his post with just a few weeks left on his term and amid revelations regarding his trading of stocks.

In an announcement released Monday afternoon, Clarida said he will be leaving his post this Friday. His term expires on Jan. 31.

The move comes following additional disclosures regarding trades Clarida made in February 2020, around the time when the Fed was getting ready to roll out what eventually would become its most aggressive policy tools ever, in an effort to combat the Covid crisis.

“Rich’s contributions to our monetary policy deliberations, and his leadership of the Fed’s first-ever public review of our monetary policy framework, will leave a lasting impact in the field of central banking,” Fed Chairman Jerome H. Powell said in a statement. “I will miss his wise counsel and vital insights.”

Clarida’s exit comes amid heightened scrutiny over what he had described as pre-planned portfolio rebalancing on Feb. 27, 2020. However, recent disclosures, first reported by the New York Times, showed that three days earlier, Clarida sold shares in three stock funds that he would repurchase on the 27th.

Markets dropped on Feb. 24 amid worries that the spreading coronavirus could cause substantial damage. On Feb. 26, Fed policymakers huddled to discuss what policy moves they might take to combat what eventually would become a full-blown pandemic.

Within weeks, the Fed would cut its benchmark interest rate to zero and institute an unprecedented array of lending and liquidity programs to help the economy and financial markets function.

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Original news source Credit: www.cnbc.com

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