Boston Federal Reserve President Eric Rosengren on Monday announced he will retire on Thursday, Sept. 30, revealing that he had qualified for the kidney transplant list in June of 2020 to treat a long-term condition, and wanted to make "lifestyle changes" to protect his health.
Rosengren was facing mandatory retirement next June when he turns 65. He was also facing public scrutiny for stock trades last year that had raised questions about the effectiveness of Fed ethics rules.
A statement from the Boston Fed did not mention that controversy, but focused on Rosengren's revelation to his staff that he had been put on the transplant list in June 2020, "upon the worsening of a kidney condition he has had for many years. Delaying the need for dialysis might be improved if he makes lifestyle changes now to lessen the risks of his condition."
"It has become clear that I should aim to reduce my stress so that I can focus on my health issues," Rosengren said in a letter Monday to Fed Chair 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."
Powell, in remarks included in the Boston Fed's release, said Rosengren had brought "relentless focus" on the safety of the financial system to his work and had "distinguished himself time and again."
It was his focus on financial stability, and particularly on possible risks in the commercial real estate market, that drew attention to investments he made during 2020 in real estate investment trusts. According to one report, those investments included none other than mortgage-backed securities, which figured at the heart of the 2008 economic meltdown that led to the Great Recession.
Along with Dallas Fed President Robert Kaplan, who made multiple million dollar trades in individual stocks in 2020, Rosengren had agreed to sell those investments by Sept. 30 amid criticism of the Fed's ethics rules including from Powell. The Fed chair has launched a broad review of Fed rules and agreed they need reform.
Sept. 30 will now also be Rosengren's last day in office.
Boston Fed First Vice President Kenneth C. Montgomery will take over as interim president during the search for Rosengren's replacement.
Given Rosengren's mandatory retirement next year, that search is already "well underway" with a search committee including six of the Boston Fed's board members, none of whom are bankers.
Rosengren, a Phd. economist, has been the president of the Boston Fed since 2007, and has been part of its staff since 1985. Prior to becoming president he was head of the bank's supervision and regulation division.
"He will be sorely missed," Corey Thomas, deputy chair of the Boston Fed's board of directors, said in a comment released by the Boston Fed as part of its statement. "We understand his decision and support him fully in addressing his health...Eric worked tirelessly during the pandemic downturn to support the nation’s economic recovery, never revealing or complaining about a worsening health condition."
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