Fed vicepresident Stanley Fischer tenders resignation

The vice president of the US Federal Reserve Stanley Fischer announced his resignation on Wednesday.

In an update posted to the central bank's website at 1545 BST, the central bank said that Fischer, aged 73, would be stepping down from the Board of Governors of the Federal Reserve System on or about 13 October.

Appointed to the board for an unexpired term finalising on 31 January, 2020, his term as vice chairman was due to expire on 12 June 2018.

His resignation letter, which was addressed to US president Donald Trump and was also published by the Federal Reserve, cited "personal reasons" as the cause of his departure.

In it, Fischer indicated that during his time on the Board the economy had continued to strengthen and that, informed by the lessons of the last financial crisis, policymakers had built on previous steps to make the financial system more resilient and better able to provide the credit which was so vital for the prosperity of the US.

By way of an initial reaction, the yield on the benchmark 10-year US Treasury note was little changed as of 1553 BST, rising by one basis point to 2.07%, and the US dollar spot index down by 0.19% to 92.1.

Shortly following the news, Bank issued a statement in which Governor Carney extolled the central banker's contribution throughout the past financial crisis.

"The combination of his encyclopaedic knowledge of economics, outstanding judgment, quiet leadership and his perennial good humour has helped policymakers around the world to navigate one of the most challenging periods in the global economy. In the years ahead, students and practitioners of macroeconomic policy will continue to draw inspiration from Stan’s contributions at the Federal Reserve and the Bank of Israel, his earlier stellar career at the IMF and his many and varied academic contributions."

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 US economist at Capital Economics.

"Accordingly, while Fischer's resignation may not affect the outlook for monetary policy that much, it could mark the beginning, along with the nomination of Randall Quarles to be Vice Chair of Supervision, of a shift toward a Federal Board of Governors that is more amenable to deregulation."