Federal Reserve Board Chairman Jerome Powell talks to reporters after the Federal Reserve raised its target interest rate by three-quarters of a percentage point to curb a disruptive rise in inflation, during a conference call. press after a two-day meeting of the Federal Open Market Committee (FOMC) in Washington, USA, June 15, 2022.
Elizabeth Frantz | Reuters
The controversial business activities of Federal Reserve Chairman Jerome Powell and former Vice President Richard Clarida did not violate any rules or laws, the Central Bank’s Inspector General’s Office ruled Thursday.
The report covered a 2019-21 period in which the two senior officials traded shares and funds while the central bank used monetary policy to influence financial markets.
The period included the weeks leading up to the Covid-19 pandemic declaration, as the Fed was lowering interest rates and instituting other market supports, moves that would intensify after the pandemic declaration.
“We have found no evidence to corroborate allegations that former Vice President Clarida or you violated laws, rules, regulations or policies related to the business activities investigated by our office,” Inspector General Mark Bialek told Powell in a letter. “Based on our findings, we close our investigation into the business activities of former Vice President Clarida and you.”
Although the report approved Powell and Clarida, Bialek said evaluations of operations by other senior Fed officials are ongoing.
Former regional presidents Robert Kaplan of Dallas and Eric Rosengren of Boston retired after revelations of their investment portfolio activities. Clarida also left and left the post in January just before taking up a teaching job at Columbia University.
The IGO verified “that I went beyond the requirements of financial ethics and outreach during my tenure as vice president,” Clarida said in a statement.
“I have always been committed to behaving with integrity and respect for public service obligations, and this report reaffirms this lifelong commitment to exceeding ethical standards,” he added.
Earlier this year, the Fed adopted a strict set of new rules that prohibit officials from trading in individual stocks and bonds, as well as in cryptocurrencies.