A watchdog report absolves financial transactions made by two top Fed officials.

“He did not act on inside information — that’s exactly what they were looking for,” Mr. Fratto said of the watchdog report.

Mr. Clarida’s resignation came earlier than had been announced, and shortly after news of his Feb. 24 stock fund sale surfaced, calling into question his initial explanation of the Feb. 27 move as part of a rebalancing. Mr. Fratto said Mr. Clarida’s decision to leave was based on the timing of the start of the term at Columbia University, where he was scheduled to begin teaching, and had nothing to do with the transactions.

Neither the Fed nor Mr. Clarida provided a reason for his slightly early departure at the time.

Mr. Powell’s transactions, from 2019, had been less eyebrow raising, and were also cleared by the Fed’s watchdog.

A financial adviser on Mr. Powell’s family trust executed transactions during the Fed’s blackout period — when officials are not supposed to trade — in December 2019. The report found that those trades were an accident: Mr. Powell’s wife was trying to obtain liquid cash for a charitable donation, the timing of the transaction meant to do so was an oversight on the part of the adviser, and Mr. Powell’s wife did not know that it had happened during the blackout period.

“Powell’s stuff, I felt very satisfied by both the conclusion and the description of what happened,” Kaleb Nygaard, a researcher at the Yale Program on Financial Stability, said in response to the report. But he said that the explanation of Mr. Clarida’s omissions and trades was not satisfying.

“That’s definitely not enough of the story,” he said.

Article source: https://www.nytimes.com/2022/07/14/business/watchdog-absolves-fed-officials.html