Eric Rosengren. Photo courtesy of the Federal Reserve Bank of Boston

Eric Rosengren, president of the Federal Reserve Bank of Boston, will retire this week, citing a dramatic downturn in his health.

Rosengren was slated to retire in June 2022 after reaching the mandatory retirement age for his position, but a statement issued by the Boston Fed said he was moving his retirement up to Sept. 30 due to a worsening, longstanding kidney condition. Rosengren said he qualified for a spot on the kidney transplant list in June of 2020 and that “lifestyle changes” made now would delay his need for dialysis and lower risks associated with the unidentified condition. Corey Thomas, chairman and CEO of Boston cybersecurity firm Rapid7 and deputy chair of the Boston Fed’s board of directors, said he and his fellow board members will be making personal donations to the American Kidney Fund in Rosengren’s honor after he retires.

““It has been an honor to serve at the Federal Reserve System, in a job where one can be constantly engaged in pursuing the economic and financial well-being of the country and New England. I know that my colleagues will build on our progress, and continue making a difference for the public we serve,” Rosengren said in a statement.

Rosengren’s retirement also comes in the wake of reporting by Bloomberg and The Wall Street Journal that showed Rosengren and Dallas Fed president Robert Kaplan engaged in stock trading during 2020 that raised ethics questions. Rosengren had investments in four REITs, Bloomberg reported, including one in which he bought and sold shares, even as Rosengren raised questions about the health of commercial real estate during the early days of the pandemic, as well as his position that the Fed should start scaling back purchases of mortgage-backed securities. The Wall Street Journal separately reported that Kaplan of the Dallas Fed, had made multiple stock trades of more than $1 million in 2020.

Both Kaplan and Rosengren said they would sell their individual investments in response, and the Federal Reserve Board said it would overhaul its financial ethics policies.

Rosengren spent over 35 years with the Boston Fed and 14 as its president, beginning in 2007 at the outset of the global financial crisis that sparked the Great Recession. He was the bank’s 13th president. Rosengren was a driving force in efforts by regional Federal Reserve banks to foreground and explore the role racism has played and continues to play in the nation’s economy. The Boston Fed is also leading the creation of the Federal Reserve’s FedNow publicly-owned payments platform.

“Eric has distinguished himself time and again during more than three decades of dedicated public service in the Federal Reserve System,” Fed Chair Jerome Powell said in a statement released by the Boston Fed. “He led the Fed’s work in managing several emergency lending facilities in two separate periods of economic crisis. In addition to his monetary policy insights, Eric brought a relentless focus on how best to ensure the stability of the financial system. My colleagues and I will miss him.”

Kenneth C. Montgomery, the Boston Fed’s first vice president and chief operating officer, will become interim president and CEO. The search committee for a permanent replacement will consist of the six non-banker Federal Reserve Bank of Boston board of directors members, and will be chaired by Boston Fed board chair Christina Paxson, president of Brown University.

“Eric’s leadership has been outstanding on so many fronts. As a result of his tireless work, the Bank is making cutting-edge contributions across all its functions, and positively affecting the economic and financial security of people in New England and the nation,” Paxson said in a statement. “His commitment to ‘Main Street’ economic issues and opportunity for all has inspired his staff, colleagues, and countless others to innovate in service to the public. And let me add that Eric is one of those rare people who combines the highest standards of intellectual rigor with the warmest collegiality, inclusiveness, and humanity. The directors wish him the very best as he focuses on improving his health.”