US Federal Reserve Vice Chairman Stanley Fischer is to resign next month for personal reasons, leaving a fourth vacancy on the seven-member Fed governing board.
Fischer is a widely respected economist who taught at the Massachusetts Institute of Technology and was head of the Bank of Israel for eight years.
His unexpected departure adds to a leadership vacuum at the top of the Fed as it navigates a difficult path.
Photo: Bloomberg
Fischer, 73, is a close confidant of Fed Chair Janet Yellen, whose own term ends in February next year.
The US central bank is slowly raising interest rates as the economy grows and unemployment falls. Yet, inflation remains below the Fed’s target, complicating its future course.
Fischer has been a member of the Fed’s Board of Governors since May 2014. His term as vice chairman was set to expire in June next year.
In a letter to US President Donald Trump , he said his resignation would occur on or about Oct. 13.
The resignation is to provide Trump with another opportunity to reshape the Fed. He has nominated Randal Quarles for one of the vacancies, as vice chairman for bank supervision.
Quarles’ nomination was scheduled to be voted on yesterday by the US Senate Committee on Banking, Housing and Urban Affairs.
All nominations to the Board of Governors require Senate confirmation.
Trump criticized Yellen’s low interest rate policies during last year’s presidential campaign, but has tempered his comments since the election.
Last month in an interview, Trump said he was considering either renominating Yellen for a second term as Fed chair or replacing her.
One potential candidate to replace her was Gary Cohn, a former top executive at Goldman Sachs Group Inc, who now lead’s Trump’s National Economic Council.
In the interview with the Wall Street Journal, Trump said he had a “lot of respect” for Yellen and would consider asking her to serve another term.
However, he also said he was still considering other candidates.
Reports earlier this year said that a leading candidate for one of the other vacant slots is Marvin Goodfriend, an economics professor at Carnegie Mellon University in Pittsburgh, Pennsylvania.
Goodfriend, 66, worked for more than 20 years at the Richmond Fed and is seen as a leading hawkish voice on monetary policy.
In congressional testimony in March, he endorsed a move being pushed by US Republican lawmakers to require the Fed to follow a rules-based approach to setting interest rate policy.
That could make it harder in the future for the Fed to slice interest rates to ultra-low levels, as it did in 2008 and 2009 amid the financial crisis and Great Recession.
Another potential nominee for a board seat is Robert Jones, the chairman and CEO of Old National Bancorp. The bank is headquartered in Indiana, Vice President Mike Pence’s home state.
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