Richard Clarida, The Fed’s Vice Chair, is Resigning Early After Trading Scandal Deepened
Richard Clarida, the vice chair of the Federal Reserve, will leave on Jan. 14, two weeks ahead of schedule. He did not give a reason.
Richard H. Clarida, the Federal Reserve’s vice chair, announced on Monday that he would resign from his position two weeks earlier than planned. While he did not give a reason, he has faced renewed scrutiny about trades he made in 2020 as the central bank was poised to rescue financial markets.
“With my statutory term as governor due to expire on Jan. 31, 2022, I am writing to inform you that it is my intention to resign from the board on Jan. 14, 2022,” Mr. Clarida wrote in a letter to President Biden that the Fed released Monday.
The New York Times reported last week that Mr. Clarida had corrected his 2020 financial disclosures in late December. Ethics experts said that one of his trades raised questions — he sold a stock fund on Feb. 24 before repurchasing it on Feb. 27, just before Jerome H. Powell, the Fed chair, announced on Feb. 28 that the Fed stood ready to help markets and the economy.
His initial disclosures noted only the purchase of the stock fund, which the Fed explained as a portfolio rebalancing. The rapid move out of and back into stocks called that explanation into question, some experts said, and the repurchase could have put Mr. Clarida in a position to benefit as the Fed reassured markets.
Neither the Fed nor Mr. Clarida provided an explanation of what happened with the trade, though the Fed’s ethics office noted in the updated filing that it still appeared to be in compliance with conflict-of-interest laws.
Mr. Clarida’s updated disclosure drew widespread media coverage and lawmaker attention: Senator Elizabeth Warren, Democrat of Massachusetts, called on the Fed to promptly release more information about it and about other trades from top Fed officials in light of the news.
It was also an inopportune moment for Mr. Powell, who has been renominated to his position by Mr. Biden is scheduled to appear on Tuesday at a confirmation hearing before the Senate Banking Committee.
Ms. Warren sits on that committee, so Mr. Powell is almost sure to face questions about why Fed officials traded so actively in 2020.
Mr. Powell and his colleagues have revamped the central bank’s ethics guidelines — in October releasing plans to overhaul them and prevent many types of financial activity, including trading during times of turmoil. He may point to that as a sign of how seriously the Fed has taken the issue.
This story is developing. Check back for updates.