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

A review from the Federal Reserve’s watchdog found that trades made by two top officials in 2019 and 2020, when the central bank was especially active in financial markets, violated neither the law nor central bank policies.

The Office of Inspector General report, released Thursday, cleared both Chair Jerome H. Powell and Richard Clarida, the former vice chair. Both had executed transactions that became the subject of media reporting, and in Mr. Clarida’s case, prompted broader criticism from lawmakers and ethics experts.

But the report does not settle what happened with 2020 transactions carried out by Robert S. Kaplan, formerly president of the Federal Reserve Bank of Dallas, and Eric Rosengren, who was the president of the Federal Reserve Bank of Boston. Both men resigned after their financial trades became the subject of intense media reporting, with Mr. Rosengren citing health reasons for his departure.

“The investigation of senior Reserve Bank officials is ongoing,” the report stated.

Still, the first phase of the investigation into a trading scandal that rocked the usually staid central bank and prompted it to usher in a sweeping ethics reform ended in good news for the Fed. Mr. Powell and Mr. Clarida’s trading “did not violate the laws, rules, regulations, or policies as investigated by our office,” the report said.

Mr. Clarida had come under particular scrutiny for a series of transactions that happened in early 2020, as the Fed was preparing its early coronavirus pandemic response. He sold out of a stock index on Feb. 24 and then bought into the stock index again a few days later, just ahead of a Fed announcement that sent equity prices higher. He disclosed the initial sale out of the stock index only belatedly, once his other transactions had come under investigation.

The watchdog’s review — which included interviews with relevant people and an investigation into emails and other records — noted the omission, but found that the trades themselves did not break any rules.

The report does not detail why Mr. Clarida moved out of stocks and back into them within a few days, at a moment of intense volatility, when the Fed’s actions were being closely watched by Wall Street. Mr. Clarida’s representative, Tony Fratto, said on a call with reporters that Mr. Clarida sold out of the stock fund to “create liquidity.” As markets seemed to be stabilizing, though, he decided that it would be better to return to the stock fund.

Mr. Clarida’s repurchase of the stock fund came on Feb. 27. A day later, the central bank released a statement making clear that it was prepared to help markets in turmoil, briefly reassuring jittery investors. Mr. Fratto said Mr. Clarida did not know about the Feb. 28 statement when he made the decision to repurchase the fund the previous day.

“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.

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