US Federal Reserve Vice Chair Richard Clarida on Monday announced that he is to leave the central bank early following questions over his equity trading activity early in the COVID-19 pandemic.
Clarida, whose term on the board of governors was set to expire on Jan. 31, would instead resign on Friday. He gave no explanation for the accelerated departure, but said in a resignation letter that he was “proud” to have helped steer “the economy away from depression.”
Clarida faced heightened scrutiny following reports last week that he undertook additional trades in February 2020 that appeared to contradict earlier explanations about his trading activities.
Photo: Reuters
The latest questions came after amended financial disclosure forms were reported by the New York Times.
Earlier on Monday, US Senator Elizabeth Warren, a Democrat, had called on Fed Chair Jerome Powell to “immediately release” information relating to the trades.
“The revelations raise concerns that Clarida may have been trading on inside information related to planned policy moves, and that the Fed has failed to disclose the full scope of officials’ trading practices to the public,” Warren said.
Powell yesterday was due to appear at a confirmation hearing over his renomination as Fed chair before the US Senate Banking Committee, of which Warren is a member.
The central bank in October last year announced stricter investment rules after the resignations of two regional Fed presidents over trading activities.
A former economics professor at Columbia University, Clarida won Senate confirmation for vice chair in September 2018.
Powell on Monday praised Clarida, saying “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.”
At his confirmation hearing, Powell was to highlight the central bank’s efforts to fight inflation and stabilize the US economy, testimony released on Monday showed.
“We know that high inflation exacts a toll, particularly for those less able to meet the higher costs of essentials like food, housing and transportation,” Powell was to tell senators. “We are strongly committed to achieving our statutory goals of maximum employment and price stability. We will use our tools to support the economy and a strong labor market, and to prevent higher inflation from becoming entrenched.”
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