Boston Fed president to retire early, citing health problems
Boston Federal Reserve Bank President and CEO Eric Rosengren said he will retire on Thursday, nine months sooner than planned, adding that he has been on the list for a kidney transplant for more than a year.
Rosengren’s retirement after 35 years of service at the bank follows ethics questions raised last year when he and other officials made financial trades at a time when the Federal Reserve was taking extraordinary measures to boost the economy during the pandemic.
The investments were permitted under current Fed rules, but Federal Reserve Chairman Jerome Powell said last week the central bank would overhaul its ethics policies.
In a letter to Powell, Rosengren said he qualified for the kidney transplant list in June 2020 and is now aiming to reduce his stress and postpone the need for kidney dialysis as long as possible.
“While working on the pandemic relief programs for money market mutual funds and small businesses, given the long hours and stress, regrettably my kidney function declined significantly,” Rosengren said in a letter to Powell. “I should aim to reduce my stress so that I can focus on my health issues.”
Rosengren, a graduate of Colby College in Waterville, has worked for the Federal Reserve Bank of Boston for 35 years and served as president for 14 years. He had planned to retire in June 2022 at the mandatory retirement age of 65.
In August, Rosengren said the central bank should ease extraordinary aid for the economy, saying the efforts were no longer helping job creation and instead pushing up prices for interest-rate sensitive products. The Fed did not ease aid at its last meeting, but signaled it may do so at its next meeting in November.
The role of interim president and CEO will be assumed by Kenneth Montgomery, the bank’s first vice president and chief operating officer. There are 12 regional Fed bank presidents who participate in the Fed’s policymaking meetings and have a rotating vote. Rosengren was scheduled to vote next year.
Given that Rosengren had been planning on retiring next year, preparations were underway for the search for the bank’s next president. The search committee will consist of the six non-banker Federal Reserve Bank of Boston board of directors members and will be chaired by Christina Paxson, chair of the bank’s board of directors and president of Brown University.
Under U.S. law, only directors not affiliated with regulated banks or financial institutions are eligible to help select a Federal Reserve Bank president. The choice must be approved by the Federal Reserve’s board of governors.
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