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Fed vice chair traded into stocks on eve of Powell pandemic statement- Bloomberg

EconomyOct 02, 2021 11:30AM ET
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© Reuters. FILE PHOTO: Federal Reserve Vice Chair Richard Clarida talks on the phone during the three-day "Challenges for Monetary Policy" conference in Jackson Hole, Wyoming, U.S., August 23, 2019. REUTERS/Jonathan Crosby/File Photo

(Reuters) - U.S. Federal Reserve Vice Chair Richard Clarida traded between $1 million and $5 million out of a bond fund into stock funds one day before Chair Jerome Powell issued a statement indicating potential policy action due to the worsening of the COVID-19 pandemic, Bloomberg News reported on Friday.

Clarida's trades were described in his 2020 financial disclosures, showing the shifting of funds out of a Pimco bond fund on Feb. 27, 2020, and buying the Pimco StocksPlus Fund and the iShares MSCI USA Min Vol Factor exchange-traded fund in similar dollar ranges, on the same day, the report said. https://bloom.bg/3l34cjb

The next day on Feb. 28, 2020, Powell released a statement that said coronavirus "poses evolving risks to economic activity." He added that the Fed was "closely monitoring developments and their implications for the economic outlook."

"Vice Chair Clarida's financial disclosure for 2020 shows transactions that represent a pre-planned rebalancing to his accounts, similar to a rebalancing he did and reported in April 2019," a Fed spokesman told Reuters.

"The transactions were executed prior to his involvement in deliberations on Federal Reserve actions to respond to the emergence of the coronavirus and not during a blackout period. The selected funds were chosen with the prior approval of the Board's ethics official," the spokesperson added.

The Bloomberg report comes as two other Federal Reserve officials came under scrutiny for investment trades they made last year and announced their retirements on Monday.

Fed vice chair traded into stocks on eve of Powell pandemic statement- Bloomberg
 

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Comments (7)
MK MK
MK MK Oct 03, 2021 7:13AM ET
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True banana republic
Warren Wesley
Warren Wesley Oct 02, 2021 8:44PM ET
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wrong from every direction. there is no defense of this. it's disparages the integrity of the fed. he gets paid to be a fiduciary. what foolishness.
Josh Modern
JoshModern Oct 02, 2021 2:53PM ET
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so then anyone who put money into stock market after covid hit because (duh) the govt will do something, is problematic? everyone did this.
Bernard Tan
Bernard Tan Oct 02, 2021 2:53PM ET
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He did it with insider info 1 day before the Fed announcement, that’s is a crime in developing countries but not USA? LOL, what a high threshold for crime. Keep it up….the world is laughing along.
Abdurrahman Peter Lauridsen
Abdurrahman Peter Lauridsen Oct 02, 2021 12:35PM ET
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The Fed can do what they want, they are in control of the market. They should all go to prison.
Warren Wesley
Warren Wesley Oct 02, 2021 12:28PM ET
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stupid
angelo luca Iannaccone
angelo luca Iannaccone Oct 02, 2021 11:42AM ET
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I no longer have any faith in regulators and in the American stock market, it is completely corrupt, better to look at Europe where regulators still have a minimum of morals and dignity
Me comment
Me comment Oct 02, 2021 11:42AM ET
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Bye
Felipe Daniel
Felipe Daniel Oct 02, 2021 11:42AM ET
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“Insider trading” could not be simpler. Looks like all FOMC members engage in material insider trading.
Me comment
Me comment Oct 02, 2021 11:42AM ET
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Insider trading is defined as use of company specific information not publicly available and then trading in that companies stock. Rebalancing bond and stock funds hardly compares.
Warren Wesley
Warren Wesley Oct 02, 2021 11:42AM ET
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by being a fed member he had access to information that was not public. he took advance. what was his financial condition for him to make such a disparaging move?
 
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