Stock trade revelations lead to third resignation at the Federal Reserve
The mini-scandal that erupted last year over Federal Reserve officials trading their personal stock and bond holdings even as the Fed was making historic interventions in the market appeared to be over. New, more rigorous ethics rules were on the way, and two of the biggest Fed traders had resigned.
Federal Reserve Vice Chairman Richard Clarida said…he will be leaving his post with just a few weeks left on his term and amid revelations regarding his trading of stock funds.
In an announcement… Clarida said he will be stepping down from 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.
Anyone serving in such a government office should understand that a seven figure stock move before the Fed makes a major policy announcement looks very bad. It has a corrosive effect on the Fed’s reputation and influence, as well as the perceived ethical standards of its senior officials.
Of course, it’s small potatoes compared to the stock-jobbers in Congress. But we don’t expect anything else from those people. We do from the Fed, which, arguably, is one of the few places left in official Washington where adults are still in charge.