Fed's Clarida to resign two weeks early amid trading controversy
Reuters
Published Jan 10, 2022 03:53PM ET
Updated Jan 10, 2022 05:37PM ET
By Ann Saphir and Jonnelle Marte
(Reuters) - Federal Reserve Vice Chair Richard Clarida, the second-in-command at the U.S. central bank who led its comprehensive monetary policy framework review, will resign on Jan. 14, the Fed said on Monday, leaving roughly two weeks before the end of his term.
Clarida's resignation followed reports that he corrected his previous financial disclosure late last month to show he sold a stock fund and then swiftly repurchased it shortly before the Fed announced a barrage of rescue programs to stem the economic fallout from the coronavirus pandemic.
His term was set to expire on Jan. 31, and U.S. President Joe Biden has nominated Fed Governor Lael Brainard to take his spot on the Fed's board.
The timing of the departure means Clarida will not be at the Fed's policy-setting meeting in late January, when officials are set to debate when to raise interest rates and how to start shrinking the central bank's $8 trillion-plus balance sheet as it responds to high inflation.
In his position as vice chair, Clarida led the 2019 monetary policy framework review and serves as a top advisor to Fed Chair Jerome Powell, who said in a statement on Monday that Clarida's work "will leave a lasting impact in the field of central banking."
The framework review resulted in a new approach in which the Fed would no longer respond to strong employment numbers in anticipation of higher inflation, instead waiting for the price increases to materialize.
Policymakers rolled out the new framework in August 2020, following years in which inflation ran below the Fed's 2% target. The central bank is now discussing raising interest rates sooner than expected and reducing its bond holdings later this year as it battles inflation substantially above its target, according to minutes from its Dec. 14-15 policy meeting.
Clarida's term at the Fed began in September of 2018 after he was nominated by former President Donald Trump. He has worked as an economics professor at Columbia University and was a managing director at the investment firm Pacific Investment Management Company (PIMCO).
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.