Vice Chair’s Departure Won’t Shake the Fed

Stanley Fischer, vice chair (for now).

Photographer: Cayce Clifford/Bloomberg

Stanley Fischer's departure from the Federal Reserve is an opportunity to salute his career, though not one for deep concern about the institution for which he was second in command.

If there's a real surprise in Fischer's resignation letter, it's probably in the timing. His four-year term as vice chair was to end next year, and few observers considered him a contender for re-appointment. Almost as few thought he would want to stay. Besides, vice chairs tend not to be re-appointed, unlike chairs, who in the modern era have usually been given at least a second shot. Think Paul Volcker, Alan Greenspan and Ben S. Bernanke.

Fischer's departure probably won't affect the short-to-medium trajectory of monetary policy. The Fed has pretty clearly flagged that this month's meeting of the Federal Open Market Committee will be devoted to the question of balance-sheet reduction. Another prospective increase in interest rates won't be on the table, realistically, until December. (Regulation may be a different story, but that isn't the subject of this piece.)