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.
In view of the replacement of United States economic leadership planned by President Donald Trump, however, the likelihood that Fischer would be appointed was brought into question.
Fischer, one of the more hawkish members of the Fed's monetary policy committee members, announced his resignation at a time when the dollar has fallen sharply. Fischer, 73, whose term was set to expire in 2020, cited personal reasons for his departure.
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.
Trump is expected to nominate a Fed chair in February when Yellen's term expires.
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In a note to clients on Wednesday, Paul Ashworth, chief United States economist at Capital Economics, wrote that Fischer's resignation "presumably lowers the odds of [Yellen] being nominated for a second term [as Fed Chair]". Yellen and Director of the National Economic Council Gary Cohn are among contenders to lead the central bank next year, according to US media.
Besides Yellen and Fischer's seats, there are already two open spots for Fed governors, who get a permanent vote on the influential committee that raises and lowers interest rates.
In a statement on Wednesday, Yellen said, "Stan's keen insights, grounded in a lifetime of exemplary scholarship and public service, contributed invaluably to our monetary policy deliberations". "We will miss his wise counsel, good humour, and dry wit". While at MIT, Fischer oversaw former Fed chairman Ben Bernanke's thesis and taught European Central Bank President Mario Draghi, according to Bloomberg.
A longtime professor of economics at the Massachusetts Institute of Technology, Mr Fischer previously was a governor at the Bank of Israel and vice-chairman at Citigroup.