Fed's Fischer first to flee from Trump administration, Yellen not far behind

Marcus Newton
September 7, 2017

Federal Reserve Vice Chairman Stanley Fischer today announced that he will step down as a member of the board on or around October 13.

In his letter of resignation, he said it was for personal reasons and did not elaborate.

"During my time on the Board, the economy has continued to strengthen, providing millions of additional jobs for working Americans", he wrote in the letter. "Informed by the lessons of the recent financial crisis, we have built upon earlier steps to make the financial system strong and more resilient and better able to provide credit so vital to the prosperity of our country's households and businesses".

Fischer, 73, has been a member of the board since May 2014. His unexpected departure adds to a leadership vacuum at the top of the Fed as it navigates a hard path.

"Fischer was the voice of experience, having been a central banker and his worldwide standing was impeccable", JPMorgan Chase & Co.'s chief United States economist Michael Feroli said. "It adds to the cloudiness of the outlook for monetary policy".

The departure would leave just three people on the Fed's seven-seat board, increasing the pressure on the Trump administration and Congress to fill some of the vacancies.

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Quarles' nomination is scheduled to be voted on by the Senate Banking Committee on Thursday.

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 U.S. economist at Capital Economics.

Reports have indicated that Yellen and Trump's chief economic advisor Gary Cohn, formerly the president and COO at Goldman Sachs (GS), are the top two candidates for the role.

Before joining the Board, Mr. Fischer was governor of the Bank of Israel, from 2005 to 2013.

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Other reports by MaliBehiribAe

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