Fed Vice Chair Clarida Traded Millions One Day Before Powell Emergency Pandemic Statement

Earlier this week, with Fed hawks suddenly dropping like flies following the resignations of Boston and Dallas Fed presidents, Rosengren and Kaplan, amid a public outcry over their recently-revealed daytrading activities which benefited them as a direct result of monetary policy decisions they were explicitly and directly involved in, we joked that if the Fed wants to get rid of all the hawks, they just need to leak the trading records of Kansas City Fed president Esther George, widely viewed as the most vocal hawk among all FOMC members.

Well, it may not be George but overnight the government ethics office published forms which showed that none other than the Fed Vice Chair Richard Clarida may be the next to "Retire" following the revelation that he was trading in and out of millions in securities on February 27, 2020 just one day before Fed Chair Powell issued an emergency statement hinting at possible policy action as the pandemic worsened.

Aside from these three trades, Clarida had a grand total of two more trades in 2020, the sale of $500K-$1MM of the Shwab SCHK ETF on August 3 and another purchase of the USMV ETF to the tune of $250K-$500K. Why does this matter? Because his trades took place just a day before Powell issued an emergency statement on Feb 28 at 2:30pm with which he sought to reassure suddenly panicking markets that the Fed has their back.

Casting even more doubt on the Fed's integrity, ethics and especially capacity to think clearly, even the Vice Chair failed to realize that buying millions in stock ahead of a greatly market moving decision had all the "Appearance" of massive insider trading.

"The pandemic was spreading quickly and the economic outlook was evolving rapidly. That was not the appropriate time for top Fed officials to be making multi-million dollar changes to their portfolios," Andrew Levin, a Dartmouth College professor and former special advisor to the Fed's Board pointed out what should have been patently obvious to all, except entitled Fed Vice Chairs who are somehow exempt from the rules that apply to peasants.

While we wait, it's probably safe to say that Clarida will be drafting his resignation in the coming days, which means that with two hawks down, the Fed is about to have another vacancy, this time to replace its centrist vice chair.

While we urge readers to go over Clarida's entire asset and income statement, we can't help but note two things: i) according to the Vice Chair, cash is anything but trash with millions spread between bank and money market accounts, and ii) judging by the aggressive diversification of his bank account holdings, the Fed Vice Chair is hardly confident about the stability of the US banking system.

https://www.zerohedge.com/markets/fed-vice-chair-clarida-traded-millions-one-day-powell-emergency-pandemic-statement