Sunday, 19 November, 2017

Stanley Fischer steps down as Fed vice chairman

Ben Bernanke Participates In IMF Research Conference Stanley Fischer will resign on or around 13 October
Marta Holmes | 07 September, 2017, 01:47

Fed watchers had thought he would step down, but had not expected it to be so soon.

Trump has nominated Randal Quarles, a senior Treasury official under President George W. Bush, to be a governor and head up the Fed's regulatory efforts.

The resignation will provide Trump with another opportunity to reshape the Fed.

Fischer, a former governor of the Bank of Israel and vice chairman of Citigroup, leaves the Fed as the central bank confronts the deepening dilemma of United States monetary policy.

The U.S. central bank is slowly raising interest rates as the economy grows and unemployment falls. All nominations to the Board of Governors require Senate confirmation.

Congress already faces a crowded agenda this fall: It needs to raise the country's borrowing limit, reach a budget agreement to keep the government operating, and plans to take up complicated tax reform.

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. Mr Trump has said she could be re-appointed, though other candidates are also under consideration.

Gary Cohn, Mr Trump's top economic advisor, who is Jewish, is reported to have seriously considered resigning after the President defended neo-Nazi protestors last month.

"Of course there's also uncertainty surrounding who will be sitting atop the FOMC in 2018", says Mendes. Yellen's term expires in February.

Since December 2015, the Fed has raised rates four times, including this March and June.

Another potential nominee for a board seat is Robert G. Jones, the chairman and chief executive of Old National Bancorp.

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