Boston Fed President Under Fire For Financial Trades Will Retire Early

The Associated Press
The Associated Press

Eric Rosengren, the president and chief executive of the Federal Reserve Bank of Boston, announced on Monday that he would retire nearly a year earlier than planned.

Rosengren said that he was retiring in hopes that a lifestyle change would prevent a kidney condition from worsening.

“It has been an honor to serve at the Federal Reserve System, in a job where one can be constantly engaged in pursuing the economic and financial well-being of the country and New England,” Rosengren said in a statement released Monday.

Rosengren was one of two Fed presidents whose financial activity in 2020 has come under fire in recent weeks. Rosengren held stakes in and traded shares of real estate investment trust at a time when the Fed was intervening in markets, including the market for mortgage securities, to stave off the effects of the pandemic.

Dallas Fed President Robert Kaplan also disclosed that he had traded millions of dollars of stocks.

UPDATE: Kaplan announced hours later that he too would retire.

The watchdog group Better Markets has called for the Fed to fire both Rosengren and Kaplan if they do not resign on their own accord. Senator Elizabeth Warren (D-MA) has called on a ban on Fed officials from buying, selling, or holding individual stocks. The Fed has announced an internal review of its policies around the financial holdings and activities of Fed officials. Both Rosengren and Kaplan have previously announced they would convert their holdings to cash and broad indexes by the end of the month.

Rosengren, 64, has been president of the Boston Fed since 2007. He had previously planned to retire in June 2022.

The Boston Fed was central to the central bank’s economic rescue efforts last year. It ran both the money market mutual fund program and the Main Street lending backstop program.

Rosengren came to the Boston Fed in 1985 as a research economist. In 2000, he was named head of the Boston Fed’s bank supervision operations. His economic work has included papers on how problems in the financial sector can spill over into the broader economy.  He held a Master of Science and Ph.D. in economics from the University of Wisconsin-Madison.

“Eric has distinguished himself time and again during more than three decades of dedicated public service in the Federal Reserve System. He led the Fed’s work in managing several emergency lending facilities in two separate periods of economic crisis. In addition to his monetary policy insights, Eric brought a relentless focus on how best to ensure the stability of the financial system. My colleagues and I will miss him,” Fed chair Jerome Powell said in a statement.

Rosengren pushed for the idea that regional Fed banks should be “visible leaders in the communities we serve.” In this regard he expanded the Boston Fed’s outreach to and impact on low- and moderate-income communities. The Bank hosted foreclosure-prevention workshops for New Englanders during the Great Recession.

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