Federal Reserve Board Vice Chairman Richard Clarida is the latest high ranking official at the U.S. central bank who made trades in personal investment accounts on the eve of key policy announcements.

According to Bloomberg:

…Clarida traded between $1 million and $5 million out of a bond fund into stock funds one day before Chair Jerome Powell issued a statement flagging possible policy action as the pandemic worsened, his 2020 financial disclosures show.

Clarida’s trades, described in forms filed with the government ethics office, show the shifting of the funds out of a Pimco bond fund on Feb. 27, 2020, and on the same day buying the Pimco StocksPlus Fund and the iShares MSCI USA Min Vol Factor exchange-traded fund in similar dollar ranges. For the year, he listed five transactions.

The following day on Feb. 28, a Friday, at 2:30 p.m., Powell took the unusual step of releasing a statement saying the virus poses “evolving risks to economic activity.” In the same statement, Powell said the Fed was “closely monitoring developments and their implications for the economic outlook.”

Clarida, through a representative, said there’s nothing to see here, move along:

“The transactions were executed prior to his involvement in deliberations on Federal Reserve actions to respond to the emergence of the coronavirus and not during a blackout period. The selected funds were chosen with the prior approval of the Board’s ethics official.”

The passive voice hides a multitude of sins – because in official Washington, what is considered legal and ethical is the real problem.  The Fed’s existing ethics guidelines should make it abundantly clear that some actions just look bad. Very bad:

Its Voluntary Guide to Conduct for Senior Officials says “they should carefully avoid engaging in any financial transaction the timing of which could create the appearance of acting on inside information concerning Federal Reserve deliberations and actions.”

It also says that they should avoid dealings that might “convey even an appearance of conflict between their personal interests, the interests of the system, and the public interest.”

But if the lawyers say it’s okay, then full speed ahead, right? And by the time the public knows (remember, these trades occurred more than a year ago), the deed is well and done.