News Worms
News Worms


Fischer to step down in mid-October as Fed vacancies mount

Fischer to step down in mid-October as Fed vacancies mount

Stanley Fischer has resigned as vice chairman and as a member of the Board of Governors of the Federal Reserve System, effective on or around October 13.

As for Yellen's replacement, NEC Cohn will likely take the Fed Chief job if he wants it and can, with Trump, trim the number of PhD economists in favor of more business executives like former Goldman Sachs President Cohn.

His term as Vice Chairman expires next June.

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

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.

In addition to the pending vacancies at the top of the Fed, there are now three vacancies on the Fed's Board of Governors, who along with five rotating regional Fed chairs comprise the 12-member FOMC.

In a note to clients on Wednesday, Paul Ashworth, chief U.S. economist at Capital Economics, wrote that Fischer's resignation "presumably lowers the odds of [Yellen] being nominated for a second term [as Fed Chair]".

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 USA economist at Capital Economics. He has worked as a chief economist at the World Bank and taught economics at MIT.

"Capital markets generally hate transition. and it appears that we will now have wholesale change at the Fed which is the last independent and competent part of United States policymaking apparatus", Schlossberg said.

Reports earlier this year suggested that a leading candidate for one of the other vacant slots is Marvin Goodfriend, an economics professor at Carnegie Mellon University in Pittsburgh.

That could make it harder for the Fed in the future to slice interest rates to ultra-low levels, as it did in 2008 and 2009, amid the financial crisis and Great Recession.

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