Published: Thu, September 07, 2017
Economy | By Melissa Porter

Vice Chair Stanley Fischer Is Stepping Down from the Fed

Vice Chair Stanley Fischer Is Stepping Down from the Fed

In his resignation letter, which came as a surprise to analysts and investors, Fischer wrote that policymakers "have built upon earlier steps to make the financial system stronger and more resilient and better able to provide the credit so vital to the prosperity of our country's household and businesses". "I'm personally grateful for his friendship and his service".

Trump has said he is also weighing whether to name his current senior economic advisor Gary Cohn as Fed chair, replacing Janet Yellen, whom he has also said he may keep in place.

"Fischer is seen as a hawk on monetary policy, relative to the Fed chair, having advocated higher interest rates in response to the strengthening US economy", Financial Times said.

In a letter to President Trump Mr Fischer, 73, said he would step down from the Federal Reserve "around 13 October". It was originally believed that Fischer was slated for appointment as chairman of the Fed. Markets sometimes moved on his comments.

Fischer is a widely-respected economist who taught at MIT and was head of the Bank of Israel for eight years. He was vice chairman of Citigroup from February 2002 to April 2005.

But with Fischer's soon-to-be-vacant seat, the president has the responsibility for nominating a candidate to the seven-member Board of Governors, and each much be confirmed by the Senate. Trump has nominated Randal Quarles, a former investment fund manager, to a fifth opening in the Fed's governor ranks. He helped shape regulatory policy keeping banks in check and accountable, and he stands by the Fed's approach even as Trump considers alternatives. His departure will remove an influential voice at a time when the central bank appears divided on the need to hike interest rates again this year despite lower-than-desired inflation.

Since December 2015, the Fed has raised rates four times, including this March and June. Rate increases are a sign that the economy is improving.

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