The resignation of two Federal Reserve chiefs amid a stock-trading scandal means an unexpected number of top monetary-policy jobs are coming up for grabs.
Eric Rosengren and Robert Kaplan, presidents of the Fed branches in Boston and Dallas, announced their retirement on Monday following disclosures about their trading activity last year.
The episode embarrassed the Fed, which is trying to persuade the public that it cares about Main Street even as its policies enrich asset holders.
It also leaves six seats on its 19-member Federal Open Market Committee that could be filled in the coming months, at a time when the central bank is under pressure to make its top ranks more diverse – and also split over the outlook for monetary policy.
As they seek to defuse the former criticism, the bank’s leadership in Washington is likely to grab more influence over new appointments at the regional banks, whose own boards may end up getting sidelined, Fed-watchers say.
There’s “an opportunity for the Fed’s Board of Governors to initiate a more open and transparent process” for selecting Fed presidents, said Andrew Levin, a Dartmouth College economist and former Fed Board senior staff member. “Serious consideration should be given to a wide range of candidates, not just longtime Fed insiders or those with close ties to finance and wealth management.”
Raphael Bostic, the Atlanta Fed chief, became the first Black regional president in 2017, more than 100 years after the system’s establishment in 1913. Among the 12 current regional presidents, just three are women.