Finance

Boston Fed president announces early retirement amid trading backlash

Eric Rosengren, president of the Federal Reserve Bank of Boston, announced Monday he would retire early due to health concerns, but the move comes amid scrutiny over financial trades he made in 2020.

Rosengren said in a statement that he would retire Sept. 30, nine months earlier than required by law, to focus on treating a kidney condition. He had been president of the Boston Fed since July 2007 and joined the bank in 1985.

While Rosengren would have been able to serve until June 2022, when he would have hit the mandatory retirement age of 65 years old, he said he would step down at the end of the week to focus on his health.

“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. 

“I know that my colleagues will build on our progress, and continue making a difference for the public we serve.”

Rosengren revealed that he qualifies for a kidney transplant after his renal health deteriorated during the pandemic, and hopes to delay the need for dialysis by retiring.

His sudden departure also comes after backlash to a series of recently disclosed investments he made while the Fed was scrambling to prop up markets during the onset of the coronavirus pandemic.

Rosengren owned stakes in several real estate investment trusts and traded several other stocks in 2020, according to The Wall Street Journal and Bloomberg. Dallas Fed President Robert Kaplan also traded millions of dollars in securities last year, according to the Journal, as the Fed was taking unprecedented steps to dampen the blow of the pandemic.

While Rosengren’s activity was of a smaller scale than Kaplan’s, his investments in commercial real estate were notable given his frequent warnings about the challenges facing the sector. 

Both asserted that they followed the Fed’s rules for financial trades, but Fed Chairman Jerome Powell announced last week that the bank would review those standards after intense criticism.

In a Monday statement, Powell nonetheless praised Rosengren and highlighted his work spearheading the Fed’s Main Street Lending Program for mid-sized businesses.

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

“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.”

Tags Banking Boston Fed Finance
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