Criticism over trades.....

Boston Fed chief to retire, citing health, amid criticism over trades

Given that he was already planning to retire, plans for a search process are “well under way,” according to a press release.

By VICTORIA GUIDA

Federal Reserve Bank of Boston President Eric Rosengren said Monday that he will retire on Sept. 30, nine months before his term ends, citing health reasons. His announcement comes after he came under fire for real estate investments he made during the pandemic.

Rosengren told staff that he qualified for the kidney transplant list last year “upon the worsening of a kidney condition he has had for many years,” the Boston Fed said in a press release.

“Delaying the need for dialysis might be improved if he makes lifestyle changes now to lessen the risks of his condition,” it added.

Rosengren turns 65 next June, an age when reserve bank presidents are generally required to retire. Whoever holds his seat will be a voting member of the Fed’s interest rate-setting committee in 2022. Given that he was already planning to retire, plans for a search process are “well under way,” according to the press release.

Rosengren drew criticism earlier this month for buying and selling securities in real estate investment trusts during the pandemic. That controversy — along with trades by Dallas Fed President Robert Kaplan — led Fed Chair Jerome Powell to launch a review of the central bank’s ethics rules. Both Rosengren and Kaplan have since said they would divest from their individual stock holdings by the end of September to avoid any appearance of a conflict of interest.

Rosengren, who has worked at the Boston Fed since 1985, has led the regional central bank branch since 2007. Last year, his bank was in charge of running the Fed’s emergency lending program for midsize businesses, the first of its kind.

The Boston Fed has also been working with the Massachusetts Institute of Technology to develop technology that could underlie an eventual central bank digital currency.

On monetary policy, he has been a prominent voice warning about the potential risks to the financial system posed by low interest rates, which can increase investor motivation to make riskier bets for higher returns.

“Eric has distinguished himself time and again during more than three decades of dedicated public service in the Federal Reserve System,” Powell said in the release. “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.”