Fed Vice Chairman Stanley Fischer to Step Down -- Update

By Harriet TorryFeaturesDow Jones Newswires

Federal Reserve Vice Chairman Stanley Fischer announced his intention to resign Wednesday, months before his term as the central bank's No. 2 official was due to expire in June 2018.

Mr. Fischer, a respected economist and former head of the Bank of Israel, said his resignation was due to personal reasons and would be effective on or around Oct. 13.

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Mr. Fischer has been a close ally of Fed Chairwoman Janet Yellen, whose term in the top job expires in early February. His decision comes as Mr. Trump mulls whether to nominate her to a second term or pick someone else.

As a key member of Ms. Yellen's inner circle of decision makers, Mr. Fischer pushed Fed leadership to gradually unwind the central bank's postcrisis policies, including raising short-term interest rates after holding them near zero for many years. During an internal debate about raising rates in 2015 he at one point appeared at odds with New York Fed President William Dudley over when to start the process. But most of his tenure was marked by unified public consensus among the three policy makers.

Mr. Trump has nominated Randal Quarles, a private-equity executive who served in the Bush administrations, for one of the three vacant Fed board slots, but has yet to name his other picks. His nominations for all board positions, including the chair and vice chair, are subject to Senate confirmation.

Mr. Fischer came to the Fed in 2014 a luminary in central banking, having taught many leading policy makers during a more-than two decade career as a professor at the Massachusetts Institute of Technology specializing in international economics. His students included European Central Bank President Mario Draghi and former Fed Chairman Ben Bernanke.

Mr. Fischer also ran a central bank -- the Bank of Israel -- from 2005 to 2013, held a senior post at the International Monetary Fund and served as a Citigroup vice chairman.

Mr. Fischer's term as Fed vice chairman was due to end in June 2018, although his term as governor wouldn't have ended until January 31, 2020. Mr. Dudley's term ends in early 2019.

In a letter of resignation to Mr. Trump dated Sept. 6, Mr. Fischer said "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."

Write to Harriet Torry at harriet.torry@wsj.com

(END) Dow Jones Newswires

September 06, 2017 12:11 ET (16:11 GMT)