WASHINGTON (Reuters) - U.S. Federal Reserve Vice Chair Stanley Fischer, a veteran central banker who helped set the course for modern monetary policy, said on Wednesday he will step down from his position in mid-October, potentially accelerating President Donald Trump’s opportunity to reshape the direction of the central bank.

In a letter to Trump, Fischer, 73, said he was resigning for personal reasons effective on or around Oct. 13, eight months before his term as vice chair expires in June.

In the letter, Fischer said jobs growth had returned to the United States and that “steps to make the financial system stronger and more resilient” had been taken - actions that may now be weakened by the Trump administration.

His departure leaves the seven-person board of governors with as few as three sitting members, depending on whether and when the Senate confirms Trump nominee Randal Quarles to the role of vice chair for supervision, a job distinct from Fischer’s vice chairmanship.

The Senate Banking Committee is scheduled to vote on the nomination on Thursday.

The White House said it had no immediate comment on Fischer’s departure or on the timing for filling his spot or other positions at the Fed.

Though the Fed often operates with fewer than its full complement of seven governors, it has never dipped as low as three. Fischer’s earlier-than-expected departure intensifies the urgency for Trump to decide how deeply he wants to overhaul U.S. monetary policy.

Fed Chair Janet Yellen’s term expires in February. While Trump has spoken approvingly of her performance he has also kept the door open to naming his top economic adviser Gary Cohn, or someone else, to the job.

The sense of confusion over the Fed’s future leadership heightened with the controversy surrounding Trump’s response to a white supremacist gathering in Charlottesville last month, as pressure mounted on Cohn, who is Jewish, to respond.

Yellen and Fischer are also Jewish, and Fischer served as governor of the Bank of Israel from 2005 to 2013 before joining the Fed. In the closing days of his presidential campaign, Trump ran out an advertisement featuring Yellen and other prominent Jewish financial figures that was criticized for its anti-Semitic overtones.

“This will certainly leave us all scrambling to understand the new calculus of the Board,” said Carl Tannenbaum, chief economist at Northern Trust in Chicago.

In the shorter term, Fischer’s departure in October may lower the likelihood of another Fed interest rate increase this year.

As some of his colleagues began wondering about a permanent downshift in global inflation and interest rates, Fischer maintained an underlying faith in the macroeconomic models - which he helped refine - that showed falling unemployment ultimately raising inflation and requiring higher interest rates in response.

“We generally saw him as a centrist on the Committee,” said JPMorgan economist Michael Feroli. “At the margin his absence may lower slightly the odds of a December hike.”

The drop in board membership to three should not impact the Fed’s workflow despite what Tannenbaum called the “lack of bench strength.”

A SMALLER BOARD

The Fed’s supervisory functions can be conducted with as few as two of the seven members, according to the board’s rules. The Fed’s rate-setting policy committee can also continue to meet, though with the five regional bank presidents on the committee in a majority.

FILE PHOTO: U.S. Federal Reserve Vice Chair Stanley Fischer addresses The Economic Club of New York in New York, U.S. on March 23, 2015. REUTERS/Brendan McDermid/File Photo

The dollar fell against a basket of currencies after Fischer’s announcement.

Over his career Fischer, a native of Zambia, helped to shape modern economic theory as an academic, trained many of today’s top central bankers and put his ideas into practice in a series of jobs. He was chief economist at the World Bank, and first deputy managing director at the International Monetary Fund during the Asian financial crisis.

He was also a vice chairman at Citigroup from 2002 to 2005 before taking over as governor of the Bank of Israel.</s>Washington: US Federal Reserve vice chair Stanley Fischer, a veteran central banker who helped set the course for modern monetary policy, said on Wednesday he will step down from his position in the middle of October.

In a letter to President Donald Trump, Fischer, 73, said he was resigning for personal reasons and that the effective date would be on or around 13 October.

“It’s been a privilege to serve on the Federal Reserve board and most especially to work alongside chair Yellen,” Fischer said, citing the improvements in the economy and financial system in recent years.

Fischer’s term as vice chair was set to expire next year but his early departure gives Trump an opportunity to further shape the central bank sooner than expected. Reuters</s>Federal Reserve Vice Chair Stanley Fischer announced Wednesday that he will resign on October 13.

Fischer told President Trump in a letter released by the Fed that he was leaving for personal reasons.

"I'm personally grateful for his friendship and his service. We will miss his wise counsel, good humor, and dry wit," Fed Chair Janet Yellen said in a statement.

Fischer's term as vice chair was set to expire in June 2018.</s>Federal Reserve Vice Chairman Stanley Fischer to resign next month for 'personal reasons'</s>Federal Reserve Vice Chairman Stanley Fischer announced his resignation Wednesday in a letter to President Trump citing “personal reasons.”

“It has been a great privilege to serve on the Federal Reserve Board and, most especially, to work alongside Chair Yellen, as well as many other dedicated and talented men and women throughout the Federal Reserve System. During my time on the Board, the economy has continued to strengthen, providing millions of additional jobs for working Americans,” Mr. Fischer wrote in a statement.

Mr. Fischer has been at the Fed for three years with his term set to expire in June 2018. His vacancy creates another opening for President Trump to nominate someone. Fed Chair Janet Yellen’s term is set to expire in February 2018, but she has said she’d be willing to stay another term if asked. Mr. Trump already nominated Randal K. Quarles, founder of the private investment firm The Cynosure Group, to an opening earlier this year.

This comes at a crucial time for the Fed, which is starting to “normalize” its $4.5 trillion balance sheet accrued in wake of the financial crisis.</s>Stanley Fischer has announced he is leaving the Federal Reserve in the middle of October 2017.

Of all the things going on in the world today, this coming departure disturbs me about as much as anything going on.

Mr. Fischer provided, in my mind, intelligence, common sense, compatibility, and all around solid characteristics. He was a strong foundation in all the turmoil going on in the world.

Mr. Fischer and I came from different schools of economic thought, but his research was excellent, well thought-out and inclusive. Even when one disagreed with him, it was important to understand what he produced. One could always learn something from him.

In practice, he was sensible and pragmatic and tended to act incrementally and not rashly or in a panic. He was, in my mind, someone who stabilized the ship, whatever the conditions.

He has been on the Board of Governors of the Federal Reserve System since May 2014 and has served in a leadership capacity as Vice-Chairman. People listened when he spoke or when he wrote.

He has also served as governor of the Bank of Israel, chief economist of the World Bank, First Deputy Managing Director of the International Fund. After leaving the IMF he served as Vice Chairman of Citigroup (C).

And, he was also a professor at MIT. The list of his doctoral students reads like a Who’s Who of economic researchers and policymakers and includes former Fed chair, Ben Bernanke.

As I have written, this is a crucial time for policy makers. Just in the Federal Reserve there are the issues pertaining to the reduction in the size of the Fed’s balance sheet, whether or not the Fed should continue to raise its short-term policy rate of interest, whether or not the financial regulations of the past decade or so should be rolled back and the role of the US dollar in monetary policy decisions.

Losing Stanley Fischer at this time is a real blow. My confidence in the future of economic policymaking in the US government has declined, even from the low level it was at, and with it, my confidence in the future of the economy has also fallen.

To me, Mr. Fischer added a certain level of confidence to whatever it was that he was involved in - regardless of what it was. He will be missed.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.</s>Federal Reserve Vice Chairman Stanley Fischer announced his intention to resign Wednesday, months before his term as the central bank's No. 2 official was due to expire.

Mr. Fischer, a respected economist and former head of the Bank of Israel, said his resignation was due to personal reasons and would be effective on or around Oct. 13.

This item was corrected at 11:12 a.m. ET. Stanley Fischer's term as Federal Reserve vice chairman expires in June 2018. The original incorrectly stated his term expires in a year and a half in the first paragraph.

Stanley Fischer's term as Federal Reserve vice chairman expires in June 2018. "Fed Vice Chairman Stanley Fischer to Step Down" at 11:02 a.m. EDT, incorrectly stated his term expires in a year and a half in the first paragraph. (Sept. 6, 2017)

Federal Reserve Vice Chairman Stanley Fischer announced his intention to resign Wednesday, months before his term as the central bank's No. 2 official was due to expire in June 2018.

Mr. Fischer, a respected economist and former head of the Bank of Israel, said his resignation was due to personal reasons and would be effective on or around Oct. 13.

Mr. Fischer has been a close ally of Fed Chairwoman Janet Yellen, whose term in the top job expires in early February. His decision comes as Mr. Trump mulls whether to nominate her to a second term or pick someone else.

As a key member of Ms. Yellen's inner circle of decision makers, Mr. Fischer pushed Fed leadership to gradually unwind the central bank's postcrisis policies, including raising short-term interest rates after holding them near zero for many years. During an internal debate about raising rates in 2015 he at one point appeared at odds with New York Fed President William Dudley over when to start the process. But most of his tenure was marked by unified public consensus among the three policy makers.

Mr. Trump has nominated Randal Quarles, a private-equity executive who served in the Bush administrations, for one of the three vacant Fed board slots, but has yet to name his other picks. His nominations for all board positions, including the chair and vice chair, are subject to Senate confirmation.

Mr. Fischer came to the Fed in 2014 a luminary in central banking, having taught many leading policy makers during a more-than two decade career as a professor at the Massachusetts Institute of Technology specializing in international economics. His students included European Central Bank President Mario Draghi and former Fed Chairman Ben Bernanke.

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.

Mr. Fischer's term as Fed vice chairman was due to end in June 2018, although his term as governor wouldn't have ended until January 31, 2020. Mr. Dudley's term ends in early 2019.

In a letter of resignation to Mr. Trump dated Sept. 6, Mr. Fischer said "it has been a great privilege to serve on the Federal Reserve Board and, most especially, to work alongside Chair Yellen as well as many other dedicated and talented men and women throughout the Federal Reserve System."</s>(JTA) — Federal Reserve Vice Chairman Stanley Fischer submitted his resignation, citing “personal reasons,” leaving only three members on the seven-seat board of governors of the U.S. central banking system.

Fischer, 73, who has been a member of the Federal Reserve’s board of governors and its vice chairman for more than three years, said his resignation is effective in October. His term as vice chairman had been set to expire in October 2018, and his term on the board of governors in 2020.

The Federal Reserve sets money policy for the U.S. to maximize employment, stabilize prices and moderate long-term interest rates along with regulating banks.

“Stan’s keen insights, grounded in a lifetime of exemplary scholarship and public service, contributed invaluably to our monetary policy deliberations,” Federal Reserve Chair Janet Yellen said in a statement announcing Fischer’s resignation. “He represented the Board internationally with distinction and led our efforts to foster financial stability. I’m personally grateful for his friendship and his service. We will miss his wise counsel, good humor, and dry wit.”

Fischer, a dual U.S.-Israeli citizen, was governor of the Bank of Israel from 2005 to 2013. He previously held senior positions at the World Bank and the International Monetary Fund. Prior to that he was a professor of economics at the Massachusetts Institute of Technology.

Yellen’s four-year term ends in February, at which time President Donald Trump can either replace her or reappoint her for another term.</s>Stanley Fischer has resigned as vice chairman of the US Federal Reserve and as a member of the board of governors, citing personal reasons.

Fischer's resignation will be effective on or around 13 October. He has been a member of the board since May 2014.

Janet Yellen, chair of the Fed, said: "Stan's keen insights, grounded in a lifetime of exemplary scholarship and public service, contributed invaluably to our monetary policy deliberations. He represented the board internationally with distinction and led our efforts to foster financial stability."

Read more: The Fed's Stanley Fischer doesn't think Dodd-Frank will be repealed

"I'm personally grateful for his friendship and his service. We will miss his wise counsel, good humour, and dry wit."

During his time on the board, Fischer served as chairman of the Committee on Financial Stability as well as the Committee on Economic and Financial Monitoring and Research.

Prior to his role at the Fed, Fischer worked as the governor of the Bank of Israel and as the vice chairman of Citigroup.

In a letter to President Donald Trump, Fischer said it was a privilege to serve the Federal Reserve board and to work alongside Yellen.

"During my time on the board, the economy has continued to strengthen, providing millions of additional jobs for working Americans," he said.

Mark Carney, governor of the Bank of England, said Fischer's contributions would continue to be studied in the years ahead.

“The combination of his encyclopaedic knowledge of economics, outstanding judgement, 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 [International Monetary Fund] and his many and varied academic contributions."

Read more: Fischer says increase in inflation is stirring</s>Stanley Fischer's term as Federal Reserve vice chairman expires in June 2018. "Fed Vice Chairman Stanley Fischer to Step Down" at 10:47 a.m. EDT, incorrectly stated his term expires in a year and a half in the first paragraph. (Sept. 6, 2017)
U.S. Federal Reserve Vice Chair Stanley Fischer announces he will resign in mid-October, eight months before his term expires.