Federal Reserve Vice Chairman Richard Clarida announced his resignation on Monday as questions swirled around controversial trades he made at the start of the pandemic.
Clarida said his resignation would be effective on Friday, just days before his term was set to end on Jan. 31. He and two former regional Fed presidents were embroiled in controversy over personal trades they made while on the job. Clarida didn’t address the trades in question in his resignation letter to President Joe Biden but did highlight the Fed’s work during the pandemic.
“I am proud to have served with my Federal Reserve colleagues as we, in a matter of weeks, put in place historic policy measures that, in conjunction with fiscal policy, steered the economy away from depression and that have supported a robust recovery in economic activity and employment since,” he wrote. “There is still road left to walk and damage to be repaired.”
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The initial controversy with Clarida came from disclosures about Feb. 27 purchases of shares in an investment fund that holds stocks. The transaction came a day prior to Fed Chairman Jerome Powell’s announcement that the central bank was ready to help the economy during the pandemic, leading some to believe that Clarida capitalized off the opportunity.
The Fed had characterized the purchase as preplanned, although the New York Times recently reported that amended disclosures now show Clarida had sold the same stock fund days earlier, making the sudden moves appear less preplanned.
Powell, who was renominated to his position and is facing a confirmation hearing before the Senate on Tuesday, thanked Clarida for his time at the central bank in a Monday afternoon statement.
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“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,” Powell said. “I will miss his wise counsel and vital insights.”
Powell will undoubtedly be asked about Clarida’s departure at Tuesday’s hearing, when he will also face questions about inflation and the Fed’s plans to raise interest rates this year.
