A Federal Reserve president who came under fire for his 2020 trades will retire early.
Eric S. Rosengren, the head of the Federal Reserve Bank of Boston, is accelerating a long-planned retirement. He cited a health issue.,
A Federal Reserve Bank president who recently came under fire for securities trading he engaged in last year, when the central bank was active in rescuing financial markets from the pandemic crisis, said he would retire nine months ahead of schedule.
Eric S. Rosengren, who is president of the Federal Reserve Bank of Boston, will retire Sept. 30, he said in a news release. Mr. Rosengren said that he was retiring to try to prevent a kidney condition from worsening, to stave off dialysis.
“Eric has distinguished himself time and again during more than three decades of dedicated public service in the Federal Reserve System,” Jerome H. Powell, the Fed chair, said in a statement released alongside the news.
Mr. Rosengren was one of two Fed presidents whose financial activity in 2020 had drawn scrutiny in recent weeks. He held stakes in real estate investment trusts and listed purchases and sales in those, at a time when he was warning publicly about risks in the commercial real estate market and helping to set policy on mortgage backed security purchases.
His colleague, Robert S. Kaplan at the Federal Reserve Bank of Dallas, gained attention for buying and selling millions of dollars in individual stocks, among other investments. Both presidents had previously announced that they would convert their financial holdings into broad-based indexes and cash by Sept. 30.
The watchdog group Better Markets has been calling for the Fed to fire both presidents if they do not resign, in light of their activity.
Mr. Rosengren has been president of the Boston Fed since 2007, and his retirement was previously planned for June 2022. The Fed’s 12 regional members rotate in and out of voting seats, and Mr. Rosengren would have had a vote on monetary policy next year.
Kenneth C. Montgomery, the Boston Fed’s first vice president, will serve as interim president. The Boston Fed’s board members — excluding bank representatives — will need to select a permanent pick for president, subject to approval from the Fed’s Board of Governors in Washington.
A longtime Fed employee who worked in research and bank supervision before becoming president, Mr. Rosengren played a key role in the 2020 crisis response. His regional Fed ran both the money market mutual fund and Main Street lending backstop programs that the Fed rolled out last year.
The Boston Fed noted in the release that Mr. Rosengren hoped that his health condition would improve, and that he would be able to “explore areas of professional interest” in the future.
Facebook said on Monday that it had paused development of an “Instagram Kids” service that would be tailored for children 13 years old or younger amid questions about the app’s effect on young people’s mental health.
The announcement comes ahead of a congressional hearing this week about internal research conducted by Facebook, and reported in The Wall Street Journal, that showed the harmful mental health effects Instagram was having on teenage girls.
Facebook said it still wanted to build an Instagram product intended for children that would have a more “age appropriate experience,” but was postponing the plans in the face of the outside criticism.
“This will give us time to work with parents, experts, policymakers and regulators, to listen to their concerns, and to demonstrate the value and importance of this project for younger teens online today,” Adam Mosseri, the head of Instagram, wrote in a blog post.
Facebook has argued that young people are using Instagram anyway, despite age-requirement rules, so it would be better to develop a version more suitable for them. Facebook said the “kids” app was intended for those age 10 to 12 and would require parental permission to join, forgo ads and carry more age-appropriate content and features. Parents would be able to control what accounts their child followed. YouTube, which is owned by Google, has released a children’s version of its app.
But since it became public earlier this year that Facebook was working on the app, the company has faced criticism from policymakers, regulators, child safety groups and consumer rights groups. They have argued that it hooks them on the app at a younger age rather than protecting them from problems with the service, including child predatory grooming, bullying and body shaming.
Opposition to Facebook’s plans gained momentum this month when The Journal published a series of articles based on leaked internal documents that showed Facebook knew about many of the harms it was causing. Facebook’s internal research showed that Instagram, in particular, had a negative mental health effect on young people, especially young girls, even while company executives publicly tried to minimize the app’s downsides.
“We need to keep going and ensure this pause becomes permanent,” said Josh Golin, executive director of Fairplay, a Boston-based group that was part of an international coalition of children’s and consumer groups opposed to the new app. “This is a watershed moment for the growing tech accountability movement.”
American policymakers should pass tougher laws to restrict how tech platforms target children, Mr. Golin said. Britain adopted an “Age Appropriate Design Code” last year that requires added privacy protections for digital services used by people under the age of 18.
Mr. Golin called on Facebook to conduct a major public education campaign to tell parents to get their children under the age of 13 off Instagram.
On Thursday, Facebook’s global head of safety, Antigone Davis, is scheduled to testify at a Senate Commerce Committee hearing titled “Protecting Kids Online: Facebook, Instagram, and Mental Health Harms.” Ms. Davis will be questioned about Facebook’s research into the impact of its apps on young people and its work to address risks to young users.
Mr. Mosseri cast the internal research in a positive light, saying it is used to help guide product decisions, including new feature that allow people to pause their account or block certain words that could be used for bullying or harassment.
Facebook said that although plans for a children’s Instagram are postponed, it planned to introduce new parental control features in the coming months.
China’s ability to blend top-down control of politics with market-based capitalism was for years seen as a source of strength. That balancing act, though, appears to be teetering. Economic growth is slowing and the country is facing a potential financial crisis in the collapse of Evergrande, a heavily indebted property developer.
Some have called Evergrande’s troubles China’s “Lehman moment,” referring to the investment bank whose collapse precipitated the 2008 global financial crisis. Others, like The New York Times’s Paul Krugman, have said that a better analogy is Japan, where years of overinvestment and an aging population led to a long period of sputtering growth, though far from an economic collapse.
Either way, China’s reaction to its challenges is to exert greater control over its largest companies, making it clear who calls the shots in the country, the world’s second-largest economy after the United States. This has significant implications for foreign investment, geopolitics and more, as a quick tour of some of Beijing’s recent crackdowns shows:
Cryptocurrency: On Friday, China bolstered its ban on all activity linked to digital currencies, which some saw as part of a broader effort to channel citizens away from private financial services providers, which include decentralized crypto services as well as popular apps like AliPay and WeChat. The move should also be seen in the context of the Chinese central bank’s advanced development of its own digital currency, which would allow the government to track and control financial transactions.
Technology: China has been turning the screws on its largest tech companies, citing unfair competition. Officials recently ordered Alibaba to divest a recently acquired stake in one of the country’s largest broadcasters and limited online game playing to just three hours a week for anyone under 18, denting companies like Tencent. Earlier this summer, Chinese officials stopped Didi from signing up new users days after China’s largest ride-sharing app listed its shares in the United States. The government said it had to do with data privacy, but the timing cast a chill over Chinese companies listing abroad.
Electric vehicle manufacturers: China is putting the brakes on its homegrown electric vehicle industry, which has been fueled by government subsidies. This month, a minister declared that the country had “too many” EV companies. The government said it would encourage consolidation and was looking to reduce aid for the industry.
For-profit education companies: In July, China banned tutoring companies from making profits and restricted foreign investment in the $100 billion sector. It is now estimated to be worth considerably less.
Energy usage: China has pledged to cut its carbon gases by 65 percent in the next decade. In September, after two-thirds of the nation missed it emission goals for the first half of 2021, Beijing imposed stricter limits on energy usage, particularly on manufactures. Numerous factories, many of them that produce parts for such U.S. companies as Apple and Tesla, say their power supply has been substantially cut, forcing some to operate by candle light.
The financial world is watching the struggles of China Evergrande Group, one of the largest property developers on earth and certainly the most indebted. Last week, a deadline to make an $83 million payment to foreign investors came and went with no indication that Evergrande had met its obligations, raising questions about what would happen if its huge debt load went sour, Keith Bradsher reports for The New York Times.
China has a lot riding on its ability to contain the fallout from an Evergrande collapse. After Xi Jinping, China’s most powerful leader in generations, began his second term in 2017, he identified reining in financial risk as one of the “great battles” for his administration. As he approaches a likely third term in power that would start next year, it could be politically damaging if his government were to mismanage Evergrande.
The government doesn’t want to move in yet because it hopes Evergrande’s struggles will show other Chinese companies that they need to be disciplined in their finances, say people with knowledge of its deliberations who spoke on condition of anonymity. But it has an array of financial tools that it believes are strong enough to stem a financial panic if matters worsen.
The government is “still going to provide a guarantee” for much of Evergrande’s activities, said Zhu Ning, deputy dean of the Shanghai Advanced Institute of Finance, “but the investors are going to have to sweat.”
Senate vote on the debt limit: The Senate is expected to vote on legislation to keep the government funded through early December and lift the limit on federal borrowing through the end of 2022 before a Thursday deadline. The United States could default on its debt sometime in October if Congress does not take action to raise or suspend the debt limit, Treasury Secretary Janet L. Yellen warned.
Consumer confidence: The Conference Board is set to report its consumer confidence index for September. The results last month showed the index’s sharpest decline since February, but preliminary data from the University of Michigan’s gauge of consumer sentiment showed a modest gain for September.
Senate Banking Committee hearing: Jerome H. Powell, the Federal Reserve chair, and Ms. Yellen will testify at the Senate Banking Committee hearing on their agencies’ oversight of the CARES Act. Economists are expecting the officials to be quizzed about inflation, a $1 trillion infrastructure bill and the debt ceiling.
NABE Conference: Ms. Yellen is set to speak at a virtual event hosted by the Los Angeles Chapter of the National Association for Business Economics. Her address will be followed by a moderated conversation with Constance Hunter, the chief economist for KMPG.
Personal Consumption Expenditures: The inflation gauge will provide insight on how much and how quickly rising prices will fade. The data comes after an update from the Fed about its plans to “taper” bond purchases that the central bank is making to support the economy.
Since January, after Britain completed the final stage of Brexit, employers have been unable to freely recruit European workers. The pandemic has also exacerbated a crisis that stems from a long-term shortage of British truck drivers.
Over the weekend, Prime Minister Boris Johnson of Britain reversed course and offered thousands of visas to foreign truckers to combat a driver shortage that has left some supermarket shelves empty and caused long lines at gas stations, Stephen Castle reports for The New York Times.
The decision, announced late Saturday, reflects the growing alarm within the government over a disruption to supplies that has prompted panic buying and, in some places, caused fuel to run out and gas stations to close.
The post-Brexit exodus of European workers is only one cause of the long-term driver shortage. The industry has had difficulties attracting workers to jobs that are traditionally lower paid and require long, grueling hours away from home. Truckers have also complained that safe parking spaces and rest stops can be hard to find.
So great is the concern that there has been speculation that the military could be called up to drive trucks. That has not yet happened, but Defense Ministry staff members will be asked to help speed up the process for truck licensing applications.
Stocks on Wall Street fell slightly, with the S&P 500 heading to start the week with a loss. The index ticked down 0.4 percent, while the Nasdaq composite dipped more than 1 percent.
The Senate is expected to hold a procedural vote Monday on legislation that would raise the U.S. debt limit and provide government funding, scheduled to lapse on Oct. 1, through December. Senate Republicans are expected to block the measure. The move could roil financial markets and capsize the economy’s nascent recovery from the pandemic downturn.
The House is set to vote on a bipartisan $1 trillion infrastructure bill on Thursday, Speaker Nancy Pelosi said on Sunday, a measure that focuses spending on transportation, utilities, pollution cleanup and other components.
European indexes were lower, with the Stoxx Europe 600 down 0.2 percent.
Oil prices rose sharply. West Texas Intermediate, the U.S. crude benchmark, climbed 2.1 percent to $75.51 a barrel. Total domestic crude inventories decreased by 3.4 million barrels for the week ending Sept. 17, the Energy Information Administration reported Wednesday.
Shares for Facebook fell 1.4 percent in early trading. Facebook said on Monday that it had paused development of an “Instagram Kids” service intended for children 13 years old or younger amid questions about the app’s effect on young people’s mental health.