Fed holds policy but signals 'a gradual tapering process'

New York (CNN Business)Eric Rosengren, the head of the Boston Federal Reserve, announced his early retirement Monday amid backlash about personal investing decisions that raised conflict-of-interest concerns.

Rosengren, the Boston Fed’s president and CEO, cited health concerns in announcing he would step down about a year earlier than planned. He was set to retire in June next year but moved that date up to this Thursday.
In a message to staff, he shared that he has a kidney condition and qualified for transplant last year. Making lifestyle changes now will delay the need for dialysis, according to the statement.

    The announcement comes in the wake of scrutiny over Fed officials’ personal trades during the pandemic while the central bank was buying billions of dollars in assets every month to shore up financial markets.

      Lobbying group Better Markets called for the resignation or removal of Rosengren, as well as Dallas Fed President Robert Kaplan, over their trading activity. The group called Rosengren’s early retirement “too little, too late” in a tweet.

      The Boston Fed recently disclosed that Rosengren had investments and trades in the real estate industry. At the same time, the central bank was buying $40 billion worth of mortgage-backed securities each month to support the US economy during the pandemic.
      “This is clearly an issue that’s being reviewed,” said New York Fed President John Williams during an interview at the Economic Club of New York on Monday. “We need to have the public’s trust.”

        Fed Chairman Jerome Powell faced questions about the trading scandal during last week’s press conference following the monetary policy update. But his responses weren’t satisfactory according to Better Markets.
        “That stonewalling sends a terrible and demoralizing message to the staff of the Fed, while undermining its credibility with the biggest Wall Street banks the Fed is supposed to supervise and regulate,” said the group’s co-founder and CEO Dennis Kelleher last week.
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