Fed Vice Chairman Stanley Fischer submits resignation for "personal reasons"

by Harriet Bell September 7, 2017, 1:43
Fed Vice Chairman Stanley Fischer submits resignation for

Mr. Fischer, 73, was appointed to the Board by President Barack Obama for an unexpired term ending January 31, 2020.

Fischer's departure comes as U.S. President Donald Trump prepares to reshape the Fed board, which now has three vacancies.

Mr. Trump has nominated Randal Quarles for one of the vacancies as vice chairman for bank supervision.

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Significantly, barring any further clarification Fischer's resignation might lead markets to believe it implied a lower likelihood of Fed president Janet Yellen being renewed in her post, said Paul Ashworth, chief United States economist at Capital Economics.

His departure will leave four of the seven seats on the Fed Board vacant.

Policymakers have twice raised rates in 2017 but a third rate hike this year is seen as increasingly unlikely because inflation has failed to rise despite persistent job growth.

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As Yellen's current term expires in February next year, Trump has also begun the search for the next Fed Chair. "He represented the Board internationally with distinction and led our efforts to foster financial stability", says Chairman Janet Yellen.

The resignation of Stanley Fischer, 73, creates another vacancy on the council that oversees the U.S. central bank. He was also the first deputy managing director of the International Monetary Fund from 1994 to 2001 and was the chief economist for the World Bank between 1988 and 1990.

But Trump said he wouldn't announce his nominee for next Fed Chair until the end of this year, as it's still too early to make that decision.

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At MIT in the 1970s, Fischer taught both Ben Bernanke, who decades later became Fed chair, and Mario Draghi, now the president of the European Central Bank. "We will miss his wise counsel, good humor, and dry wit".

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