Fed Vice Chairman Stanley Fischer resigns

Akin Oyedele

Sep. 6, 2017, 10:46 AM
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Federal Reserve Vice Chairman Stanley Fischer.REUTERS/Jonathan Crosby

Stanley Fischer, the vice chairman of the Federal Reserve, plans to step down by October 13.

Fischer on Wednesday cited "personal reasons" for his decision in a letter to President Donald Trump.

"It has been a great privilege to serve on the Federal Reserve Board and, most especially, to work alongside Chair Yellen as well as many other dedicated and talented men and women throughout the Federal Reserve System," Fischer said in his resignation letter.

Fischer has served at the Fed for three years. His term was set to expire next June.

His resignation will create a fourth vacancy on the Fed's Board of Governors ahead of February, when Fed Chair Janet Yellen's term ends. She has said she would stay on for another term, though Trump could nominate someone else.

"What this tells us is that President Trump will control the Federal Reserve," Jaret Seiberg, an analyst at Cowen, said. "The only two holdovers are Lael Brainard and Jerome Powell. Both were Obama nominees."

In July, Trump nominated former Treasury undersecretary Randy Quarles as the Fed's vice chairman of supervision to oversee the banking industry.

The central bank is preparing to start unwinding the $4.5 trillion balance sheet it built up by buying bonds and other assets after the recession. This effort is another step the Fed is taking to gradually reverse its crisis-era policies that are less necessary now that the economy is in an eighth year of expansion.

Fischer is widely considered a centrist on monetary policy whose views are closely aligned to Yellen's. "He represented the board internationally with distinction and led our efforts to foster financial stability," Yellen said in a statement. "I'm personally grateful for his friendship and his service."

Fischer, 74, was governor of the Bank of Israel for eight years before joining the Fed. He holds a Ph.D. in economics from the Massachusetts Institute of Technology.

Here's his resignation letter: