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After the Fed announced the minutes of its December 14-15 policy meeting, Fed members were criticized this week. After the update, the outgoing Fed’s vice chairman of trading activities reignited the ethical dialogue.
Richard Clarida’s deal is under scrutiny
The U.S. Central Bank can shake up the market, this is Saw it earlier this week When the Fed released last month’s policy meeting update, the update indicated that the Fed plans to raise interest rates and reduce quantitative easing (QE).Soon after, the New York Times (NYT) published an article New Disclosure Report Regarding the outgoing Federal Reserve Vice Chairman Richard Clarida.
The New York Times author Jeanna Smialek wrote, “The corrected disclosure shows that Vice Chairman Richard H. Clarida sold an equity fund, Then quickly repurchase it before the Fed makes a major announcement.” The reporter further added: “The outgoing Fed Vice Chairman Clarida initially failed to disclose the scale of his financial transactions in early 2020 because the Fed is preparing Break into and save the market as the pandemic spreads.”
The deal executed by Kaplan and Powell has been criticized in the past, with former Obama administration ethics officials calling Clarida’s deal “exotic”
This is not the first time a member of the U.S. Central Bank criticize Their trade. Last September, the Wall Street Journal (WSJ) publish an article This shows that Robert Kaplan, the chairman of the Dallas Federal Reserve Bank, “has conducted multiple stock transactions in excess of one million dollars in 2020 based on the financial disclosure statements provided by his bank.” Controversy push Federal Reserve Chairman Jerome Powell instructed his staff to begin an ethical investigation of the financial activities of Fed members.
Smialek’s report shows that Clarida’s transaction is describe As a “rebalancing”, Clarida called these differences “unintentional errors.” Peter Conti-Brown, a Federal Reserve historian at the University of Pennsylvania, told Smialek that the problems of Fed members are “very problematic.” Norman Eisen, an ethics officer in the Obama administration, told the New York Times reporter that this was “very strange.”
“It’s fair to ask-in what way does this constitute a rebalancing?” Eisen further commented.
The transactions made by members of the Federal Reserve prior to the advancement of the Covid-19-related monetary easing policy have received a lot of scrutiny. Clarida’s deals especially It is said that Settlement the day before Powell announced the Fed’s emergency measures to help boost the economy. The alleged transactions by members of the Federal Reserve led politicians such as Senator Elizabeth Warren (D-Mass.) to call on the U.S. Securities and Exchange Commission (SEC) to investigate ethical issues.
What do you think of the Fed members being scrutinized and criticized for their stock trading this week? Please tell us your thoughts on this topic in the comments section below.
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