Boston Fed chief Eric Rosengren on Monday cited health concerns when he announced his resignation about a year ahead of schedule. He should retire next June, but move that date to this Thursday. In a message to staff, he said he had kidney disease and qualified for a transplant last year. If you change your lifestyle now, dialysis will be required, the statement said.
Later on Monday, Dallas Fed chief Robert Kaplan followed suit in a statement that his resignation would take effect October 8th.
“The Federal Reserve is nearing a critical point in our economic recovery as it ponders the future path of monetary policy. Unfortunately, there is a danger that the recent focus on my financial disclosures will distract the Federal Reserve from doing this important work. Because of this, I have decided to retire as President and CEO of the Federal Reserve Bank of Dallas, ”Kaplan said in the statement.
Fed officials were put on trial for personal deals during the pandemic, while the central bank bought billions in assets every month to prop up financial markets.
On Tuesday, Fed Chairman Jerome Powell, while testifying to the Senate Banking Committee, said the central bank should look at officials’ past trading activities.
“It really doesn’t work now,” Powell said of the Fed’s rules. “We understand that. We need to change our practices.”
The Better Markets lobby group has called for the resignation or removal of both bank chiefs because of their trading activities. The group called Rosengren’s early retirement “too little, too late” in a Monday morning tweet.
The Boston Fed recently announced that Rosengren is investing and doing business in the real estate industry. At the same time, the central bank bought $ 40 billion worth of mortgage-backed securities every month to help the U.S. economy during the pandemic.
“This is clearly an issue that is under review,” said New York Fed President John Williams in an interview with the Economic Club of New York on Monday. “We need the public’s trust.”
Fed Chairman Jerome Powell asked questions about the trade scandal during the press conference last week following the monetary policy update. But, according to Better Markets, his answers were unsatisfactory.
“This stonewalling sends a terrible and demoralizing message to Fed staff while undermining their credibility with the largest Wall Street banks the Fed is supposed to oversee and regulate,” said group co-founder and CEO Dennis Kelleher last week.
– CNN’s Matt Egan contributed to this report.
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