Two US Hawkish Fed Officials Ousted... Fallout from Involvement in Improper Stock Trading

Rosengren Boston Fed President and Kaplan Dallas Fed President Resign
Potential Impact on Fed Monetary Policy Due to 'Hawkish' Resignations

Eric Rosengren, President of the Boston Fed
[Photo by AP]

[Asia Economy New York=Correspondent Baek Jong-min] The presidents of the U.S. regional Federal Reserve Banks, who were embroiled in controversy over inappropriate stock trading, have announced early resignations one after another.

Eric Rosengren, President of the Boston Fed, and Robert Kaplan, President of the Dallas Fed, each announced their resignations on the 27th (local time).

Rosengren was scheduled to retire in June next year but will step down nine months earlier. Kaplan will leave his position on the 8th of next month.

Rosengren mentioned that he was resigning due to health reasons, but it is interpreted that the controversy over conflicts of interest and calls for resignation spread after it was revealed that he held shares in four real estate investment trusts and traded individual stocks last year.

Kaplan stated that his stock trading issues were the reason for his resignation. He said, "My issues pose a risk of interfering with the Fed's ability to perform its important duties," explaining his reason for stepping down. It was also revealed that Kaplan traded stocks worth more than one million dollars last year.

The stock trading by both has led to criticism that it was inappropriate to engage in real estate investment trusts and stock trading while the Fed was lowering interest rates and purchasing U.S. Treasury bonds and mortgage-backed securities (MBS) to mitigate the economic impact of the COVID-19 pandemic.

The resignations of the two presidents are expected to impact the Fed's monetary policy. Both Rosengren and Kaplan were regarded as 'hawks' within the Fed.

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