Federal Reserve Bank of Boston President Eric Rosengren, who has been mired in an ethics controversy surrounding trades made during the pandemic, will be resigning nine months early because of health concerns.
Rosengren has been facing public scrutiny over trades of securities that could be influenced by Fed policy. The Boston Fed said in a news release that Rosengren, 64, would be out of his role by the end of the week. He had previously planned to retire in June of next year.
“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,” he said about the decision. “I know that my colleagues will build on our progress, and continue making a difference for the public we serve.”
Rosengren has been suffering from an unspecified kidney issue and qualified for the kidney transplant list more than a year ago amid the COVID-19 pandemic, he revealed to the Boston Fed. The central bank said that Rosengren may be able to delay his need for dialysis if he makes lifestyle changes now.
POWELL VOWS FED WILL ‘MAKE CHANGES’ AFTER TRADING CONTROVERSY
Rosengren, who was named president of the Boston Fed in July 2007, faced an ethics controversy earlier this month. He, along with Robert Kaplan, the president of the Federal Reserve Bank of Dallas, made the trades in question during 2020, when the Federal Reserve began an asset-buying program in an effort to insulate the U.S. economy during the pandemic.
Both men have denied any wrongdoing and said they did not violate ethics rules, although Kaplan and Rosengren pledged that they would be selling their individual security holdings by the end of September and would hold those funds in broad indexes and cash instead.
Fed Chairman Jerome Powell spoke about the controversy during a press briefing after the central bank’s two-day Federal Open Market Committee meeting last week. Powell said that the Fed has begun a “comprehensive review of the ethics rules around permissible financial holdings and activity by Fed officials.”
“We need to make changes, and we’re going to do that as a consequence of this,” Powell told reporters.
Reacting to news of Rosengren’s departure on Monday, Powell said that he will be missed and praised Rosengren’s “relentless focus” on ensuring stability in the financial system.
“Eric has distinguished himself time and again during more than three decades of dedicated public service in the Federal Reserve system,” Powell said. “He led the Fed’s work in managing several emergency lending facilities in two separate periods of economic crisis.”
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Kenneth Montgomery, the Boston Fed’s first vice president, will serve as interim president while directors at the bank decide on who to select to replace Rosengren.
