The economist who has been president of the Federal Reserve Bank of Boston for the last 14 years and has been under recent scrutiny for his pandemic stock trading, announced Monday morning that he will retire this week to tend to a medical condition that “significantly” worsened during the pandemic.
Eric Rosengren’s Sept. 30 retirement comes about nine months before his 65th birthday and therefore his mandatory retirement as head of the New England region of the nation’s central bank. It will open up a powerful position that has been held by two people for nearly 30 years at a time when the Fed is engaged in steering the economy through a pandemic.
In his resignation letter, Rosengren said his kidney function “declined significantly to the point that I qualified for the kidney transplant list in June of 2020.”
“It has become clear that I should aim to reduce my stress so that I can focus on my health issues, and postpone for as long as possible my need for kidney dialysis,” Rosengren wrote to Fed Chairman Jerome Powell. “It is equally important for the Federal Reserve Bank of Boston and the Federal Reserve System to focus on what is important — to return the economy to full employment and carry out the important work conducted by the Boston Fed.”
Rosengren has been in hot water recently after his 2020 trading in real estate investment trusts, during a time when his organization had an outsized influence on markets, came to light. Concerns about Rosengren’s trading, combined with similar issues related to the head of the Dallas Fed, has led the central bank to take another look at its ethics rules.
Kenneth Montgomery, the Boston Fed’s first vice president and chief operating officer, will assume the role of interim CEO and president later this week. The bank said that “preparations were well under way for conducting the search for the Bank’s next president” since Rosengren had to retire by June 2022.
Rosengren joined the Boston Fed as an economist in 1985 and served as head of supervision, regulation and credit before he succeeded Cathy Minehan as president in 2007. Minehan held the president’s position at the Boston Fed for 13 years following the tenure of Richard Syron. Boston is one of 12 regional reserve banks in the Federal Reserve system.
