A Battle for Influence Within the Fed Is Brewing
The institution’s inner circle has often regarded regional officials as irritating and noisy. The exit of Rosengren and Kaplan is a chance to undercut those positions.
Gone.
Photographer: Paul Yeung/BloombergWhile traders and policy makers preoccupy themselves with the question of Federal Reserve Chair Jerome Powell’s reappointment, a quiet battle for influence within the institution is intensifying. The exit of two regional officials could quiet dissent and further strengthen the chair’s considerable grip on monetary policy in the world’s largest economy.
Eric Rosengren, president of the Boston Fed, and Robert Kaplan, his counterpart in Dallas, said Monday they will leave their posts. Rosengren cited ill-health, but both he and Kaplan had come under mounting criticism after their 2020 financial disclosures showed they held and traded financial assets while the Fed was actively supporting markets through the pandemic. The revelations brought widespread criticism of potential conflicts of interest and underscored concerns that ultra-easy monetary policy benefited the wealthy. Even if both had cleared Fed rules and ethical guidelines, the optics were abysmal.