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Fed members came under criticism this week after the Fed released the minutes of its Dec. 14-15 policy meeting. After the update, the outgoing Fed vice chair of trading activity reignited the ethics conversation.
Richard Clarida’s deal under scrutiny
The U.S. central bank can shake the market, which is seen earlier this week When the Fed released an update on last month’s policy meeting, it indicated the central bank planned to raise interest rates and cut quantitative easing (QE).Soon after, the New York Times (NYT) published an article new disclosure report On outgoing Fed Vice Chairman Richard Clarida.
The New York Times author Jeanna Smialek wrote, “Corrected disclosures show that Vice Chairman Richard Clarida sold an equity fund and then quickly repurchased it ahead of the Fed’s big announcement. The reporter further added that “outgoing Fed Vice Chair Clarida initially failed to disclose the size of his financial transactions in early 2020 as the Fed prepared to pounce and rescue markets in the event of a contagion.”
Critic in the past of deals executed by Kaplan and Powell, former Obama administration ethics official called Clarida’s deal “extraordinary”
This is not the first time a member of the US central bank criticize Their trade. Last September, The Wall Street Journal (WSJ) published an article This shows that Dallas Fed President Robert Kaplan “has conducted millions of dollars in stock trades in 2020, according to financial disclosure forms provided by his bank.”dispute push Federal Reserve Chairman Jerome Powell has directed his staff to begin an ethics investigation into the financial activities of Fed members.
Smialek report shows Clarida deal describe As a “rebalance,” Clarida called the differences “unintentional errors.” Federal Reserve historian Peter Conti-Brown of the University of Pennsylvania told Smialek that there are “serious problems” with Fed membership. Norman Eisen, an ethics official in the Obama administration, told The New York Times that it was “peculiar.”
“It’s fair to ask — in what way does this constitute a rebalancing?” Eisen commented further.
Deals made by Fed members ahead of moving ahead with Covid-19-related monetary easing are under heavy scrutiny.Clarida’s deal especially it is said The settlement came a day before Powell announced emergency measures by the Federal Reserve to help boost the economy. The alleged dealings by Fed members have led politicians such as Sen. Elizabeth Warren (D-Mass.) to call on the Securities and Exchange Commission (SEC) to investigate ethics issues.
What do you think about Fed members being scrutinized and criticized for their stock trading this week? Let us know what you think about this topic in the comments section below.
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