Vice Chair Fischer plans to quit Fed
There are now four vacancies on the seven-member board, and Yellen’s term ends in February.
WASHINGTON» Federal Reserve Vice Chairman Stanley Fischer will 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 MIT 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.
Fischer, 73, is a close confidant of Fed Chair Janet Yellen, whose own term ends in February
The U.S. 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 next June. In a letter to President Donald Trump, he said his resignation would occur on or around Oct. 13.
The resignation will 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 is scheduled to be voted on by the Senate Banking Committee on Thursday. All nominations to the Board of Governors require Senate confirmation.
Diane Swonk, chief economist at DS Economics and a longtime Fed watcher, said Fischer’s resignation could make it more likely that the Trump White House will simply re-nominate Yellen, rather than naming a new Fed chair.
Congress already faces a crowded agenda this fall: It needs to raise the country’s borrowing limit, reach a budget agreement to keep the government operating, and plans to take up complicated tax reform.
“It would be easier to keep her around,” Swonk said. “You’re talking about a lot of turnover when uncertainty about Fed policy is already high.”
Trump criticized Yellen’s lowinterest rate policies during the campaign but has tempered his comments since the election.
One potential candidate to replace Yellen is Gary Cohn, a former top executive at Goldman Sachs, who now lead’s Trump’s National Economic Council.
Yellen has said she intends to serve out her current term but has declined to say whether she would consider serving another term.