Federal Reserve Vice Chairman Richard Clarida will leave the central bank two weeks earlier than planned, following increased scrutiny into financial transactions he made in 2020 — while the Fed was taking action to save the U.S. economy.
Clarida, who served as the central bank’s No. 2 official on monetary policy efforts through the pandemic, said he will step down from the Fed effective Jan. 14. He was appointed by the Trump administration in September to serve for a term that expired Jan. 31, 2022.
At the time, the Fed insisted the move was part of a preplanned rebalancing.
But then Clarida amended the filings to show he had actually moved out of the stock fund while markets were sinking, only to buy back into the fund three days later.
Ethics concerns had also been unearthed for Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren. Both stepped down in late September and early October. The letter was sent on Monday, the day before Powell was set to face the Senate Banking Committee for a confirmation hearing for his second term.
In response to the public backlash, Powell in October unveiled “tough new rules” that bar senior officials from actively trading and prohibits the purchase of any individual securities. The new rules effectively only allow purchases of diversified investment vehicles (like mutual funds), and cannot be done during times of “heightened financial market stress” like the spring of 2020.