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Powell’s Odds of Reappointment Fall. Third Fed Member Ensnared in Controversy

edited October 2021 in Other Investing
“Powell's chances have fallen from about 80% in August to 61% as of Monday morning. The sharp decline comes amid an ongoing stock trading controversy that has ensnared several Fed governors and led to the resignations of Boston Fed President Eric Rosengren and Dallas Fed President Robert Kaplan.”

Third member now implicated amid growing public outcry

Federal Reserve Vice Chair Richard Clarida switched between $1 million to $5 million from a bond fund into stock funds a day before Chairman Jerome Powell said coronavirus poses risks to the US economy, according to his financial disclosures from 2020. Forms filed with the government ethics office show that Clarida shifted funds out of a Pimco bond fund on February 27 last year, and bought into the Pimco StocksPlus Fund and the iShares MSCI USA Min Vol Factor exchange-traded fund on the same day, Bloomberg reported on Friday.

PS - I’ve played around with the caption - not wanting to allege wrongdoing by Clarida. For better or worse, his trading has drawn suspicion and he’s become part of the larger issue.


  • edited November 2021
    The Clarida investment misstep was already reported in the media and discussed at MFO along with those of Rosengren and Kaplan. Clarida's move was too early and resulted in opportunity cost biggly for his family. I think he should be chastised for poor market timing skills not for purported / presumed insider trading.
  • edited November 2021
    Might boil down to whichever they think may “goose” the equity markets more (not that they need goosing). Conventional wisdom would say that’s Brainard, who’s perceived as more liberal.

    Powell can’t be happy to have been left hanging in the wind for so long. Possibly his influence within the broader FOMC policy making committee has been diminished - whether renominated or not.

    Added thought … Has Biden backed himself into a corner? If it is Powell, might the markets not like the decision? We’ll soon know.
  • Does anybody believe what comes out of their mouths?
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