It is possible there is an easy explanation for the revised story of Federal Reserve Board Vice Chairman Richard Clarida’s personal account trades days before Chair Jerome Powell announced the resumption of some and creation of new facilities to loosen liquidity and reassure markets as a novel coronavirus swept the world. If so, it is in the interest of the White House and the Fed to communicate that narrative as soon as possible.
Everything the White House wants to do in reshaping the Board is at stake. It’s the Fed leadership’s responsibility to explain what happened, when and why to the White House and then the Senate Banking Committee. If that’s happened the public should be informed quickly to counter the New York Times story yesterday in which ethics practitioners and academics cast a pall over Clarida’s revised story and actions in late February last year.
Absent this potentially helpful retrospective, Senate Banking Chairman Sherrod Brown cannot have confidence moving forward with Fed confirmation hearings scheduled for next week. Otherwise, he would be forced to stay on schedule risking he might lose a vote or two in committee or postpone confirmation votes for the central banks’ chair and vice chair. Neither of those actions would help market confidence in the Fed or the White House.
