Federal Reserve Vice Chairman Richard Clarida said on Monday he would resign from the Fed on Friday, two weeks after his term ends.
Clarida’s resignation comes amid concerns over his disclosures and business activity at the start of the pandemic. He is the third senior Fed official to resign amid such concerns since late September.
In a letter to President Joe Biden announcing his resignation, Clarida said it was a “distinctive honor and an immense privilege” to serve on the Fed’s board of governors. He considered actions taken by the Fed in early 2020 to brace the economy for the impact of the pandemic.
“I am proud to work with my Federal Reserve colleagues as we have, in just a few weeks, implemented historic policy measures that, in combination with fiscal policy, have lifted the economy out of depression and which have led to a strong economic recovery. Has supported improvement in activity and employment since,” wrote Clarida.
During Clarida’s time at the Fed, the central bank revamped its process for setting interest rates, namely by allowing inflation to run above its target rate of 2%, where inflation was lower. Basically, this means the Fed is not on auto-pilot to raise interest rates and will allow inflation to warm up a bit to support the labor market and economy, if necessary.
“Rich’s contribution to our monetary policy discussions and his leadership in the Fed’s first public review of our monetary policy framework will leave a lasting impact on central banking,” Fed Chairman Jerome Powell said. “I will miss his wise advice and vital insight.”
Before becoming a board member and vice president in September 2018, Clarida was Professor of Economics and International Affairs at Columbia University.
Write to Carleton English at [email protected]