N.Y. Fed president to retire in 2018

William Dudley, president of the Federal Reserve Bank of New York and a key ally of Fed chief Janet L. Yellen, will retire in mid-2018, creating another opening in the top ranks of decisionmaking at the nation’s central bank.

The New York Fed’s announcement Monday followed President Trump’s nomination last week of Jerome H. Powell to succeed Yellen as chair in February and the departure last month of Stanley Fischer as vice chair. The Fed’s board also has three additional vacancies.

The New York Fed said Dudley, 64, intended to step down in the middle of next year to ensure that his successor would be in place well before the mandatory end of his term in January 2019.

The head of the New York Fed is a permanent voting member of the Fed policymaking committee that sets interest rates. The Fed’s seven board members and five of the 12 regional bank presidents sit on the panel. Unlike the New York Fed president, other regional bank chiefs vote on a rotating basis.

Trump hasn’t announced nominations for the three other board jobs, and Yellen hasn’t said whether she will remain on the board once her term as chair ends Feb. 3. Her separate term on the board runs until 2024.

The New York Fed announced that a search committee had been formed to choose a successor to Dudley, who joined the New York Fed in 2007 after more than two decades at Goldman Sachs. After overseeing the New York Fed’s securities operations for two years, Dudley succeeded Timothy Geithner as president of the New York Fed after Geithner became Treasury secretary in 2009.

Dudley won praise for the work he did with Geithner and then-Fed Chairman Ben S. Bernanke to contain the fallout from the 2008 financial crisis.

A close supporter of Yellen, Dudley supported her cautious approach to raising the Fed’s benchmark rate and the plan the central bank has begun to gradually shrink its $4.5-trillion balance sheet, which is five times the size it was before the financial crisis.

The balance sheet contains $4.2 trillion in Treasury and mortgage bonds that the Fed bought since 2008 to help the economic recovery.

In a statement, Yellen praised Dudley for his “wise counsel and warm friendship throughout the years of the financial crisis and its aftermath.”