Leadership gap at Fed
Vice chair Fischer to resign
WASHINGTON — Federal Reserve Vice Chairman Stanley Fischer will resign next month for personal reasons, leaving a fourth vacancy on the sevenmember 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 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 today. 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 renominate Yellen, rather than naming a new Fed chair.
Trump criticized Yellen’s low-interest rate policies during the campaign but has tempered his comments since the election.
In an interview with The Wall Street Journal last month, Trump said he was considering either renominating Yellen for a second term as Fed chair or replacing her.
Yellen has said she intends to serve out her current term but has declined to say whether she would consider serving another term.