University of Michigan provost named next Boston Fed chief

The Federal Reserve Bank of Boston today announced that Dr. Susan M. Collins will be its next president and chief executive officer.

Courtesy of Federal Reserve Bank of Boston.

The Boston Federal Reserve, which is leading the central bank’s potential foray into digital currency and saw its chief resign last year amid a stock trading controversy, has a new chief.

Susan M. Collins will lead the central bank branch and take over on July 1, replacing Eric Rosengren, who retired last year for health reasons and following revelations that he had been involved in securities trading in 2020. This was around the same time the Fed was unleashing unprecedented programs to help the economy and financial markets through the Covid crisis.

Currently provost and executive vice president for academic affairs at the University of Michigan, Collins will succeed interim president Kenneth Montgomery.

“Dr. Collins brings the technical expertise and insight needed to contribute to policy development and the leadership capacity to lead the organization,” said Christina Paxson, president of Brown University who led the research of the new president.

A statement announcing her appointment described the new leader as “an international macroeconomist with a lifelong interest in politics and its impact on living standards.”

The Boston Fed is leading what is called Project Hamilton, an exploration of the possible development of a central bank digital currency. The institution released a study last week that addresses the technical issues involved, though it has taken no position and established no pilot projects moving forward.

Previously, the Boston Fed handed over the Main Street lending program during the pandemic.

“Throughout my career, I have been driven by a commitment to leverage research, education and public service to improve lives,” Collins said in a statement accompanying her announcement. “I look forward to helping the Bank and the System pursue the dual mandate given to the Fed by Congress – to achieve price stability and maximum employment.”

The Fed is set to embark on a new round of rate hikes in March as it seeks to control inflation at its fastest pace since the early 1980s, when the United States faced the twin threat of stagflation of low growth and rising prices.

Along with that, the central bank will likely start cutting its more than $8 trillion in bonds by the summer. A 4% unemployment rate has been accompanied by an increase in wages which exerts additional inflationary pressures.

Collins will come on board after the end of the academic year. Montgomery will remain as senior vice president and chief operating officer.

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