Number two at US Federal Reserve to step down

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.

In view of the replacement of U.S. economic leadership planned by President Donald Trump, however, the likelihood that Fischer would be appointed was brought into question.

"It has been a great privilege to serve on the Federal Reserve Board and, most especially, to work alongside Chair Yellen", Fischer wrote.

As Yellen's current term expires in February next year, Trump has also begun the search for the next Fed Chair. "He represented the Board internationally with distinction and led our efforts to foster financial stability", Fed Chair Janet Yellen said in a statement. He also taught economics at MIT for more than 20 years-former Fed chairman Ben Bernanke was a student.

Nominated by President Barack Obama, Fischer worked with Chairman Janet Yellen to lift the USA out of the financial crisis and recession through a strategy involving low interest rates and money printing.

But with Fischer's soon-to-be-vacant seat, the president has the responsibility for nominating a candidate to the seven-member Board of Governors, and each much be confirmed by the Senate. The Senate is expected to vote tomorrow on the nomination of Randal Quarles, who was appointed by President Trump to serve as the Fed's vice chairman for supervision. The Fed is talking about an interest rate hike, but the real bombshell is reining in the $4.5 trillion U.S. federal budget.

Fischer is a former vice chairman of Citigroup, the former first deputy managing director of the International Monetary Fund, and the former chief economist of the World Bank. Before that, Fed officials hadn't voted for a rate hike in almost a decade.

  • Tracy Klein