For a few months now there have been concerns regarding Federal Reserve Chairman Jerome Powell and former Vice Chairman Richard Clarida – and their relationship with trading stocks with information that would be deemed “insider information.” As of yesterday, however, the central bank’s Office of Inspector General considered that both members of the Fed did not break any rules or laws. The report investigated a period from 2019-2021 when both officials traded stocks and funds while the central bank used monetary policy to influence financial markets.
One segment of this period was right before the Fed made a declaration regarding the Covid-19 pandemic and their decision to slash interest rates. Even though the timing is definitely suspicious, the Inspector General Mark Bialek explained quite clearly in a letter to Jerome Powell that: “We did not find evidence to substantiate the allegations that former Vice Chair Clarida or you violated laws, rules, regulations, or policies related to trading activities as investigated by our office” and “Based on our findings, we are closing our investigation into the trading activities of former Vice Chair Clarida and you”.
What do you think about this conclusion and do you think it’s possible that insider trading still occurred?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.