Fed inflation hawk Warsh resigns

kevin_warsh.gi.top.jpgFederal Reserve Gov. Kevin Warsh By Annalyn Censky, staff reporter


NEW YORK (CNNMoney) -- Federal Reserve Governor Kevin Warsh is stepping down from the central bank's board.

Considered one of the most hawkish members of the Fed because he's vigilant about inflation risks, Warsh has served on the board since 2006.

"I am honored to have served at a time of great consequence," Warsh wrote in his resignation letter delivered to President Obama on Thursday.

In an official statement, Fed Chairman Ben Bernanke spoke highly of Warsh's knowledge of financial markets -- a skill that he said "proved invaluable during the recent crisis." Warsh previously worked in the mergers and acquisitions department at Morgan Stanley in New York.

"I deeply appreciate his insights and wise counsel and, most especially, his fortitude and friendship during the difficult days, nights, and weekends of the crisis." Bernanke said.

It is unclear why Warsh resigned. He will officially leave his post at the end of March; his term was scheduled to expire in 2018.

Warsh's resignation creates a second vacancy on the seven-member Fed board in Washington.

Nobel-winning economist Peter Diamond is still awaiting confirmation from the Senate, after President Obama twice nominated him for one of the open spots.

At only 40 years old, Warsh was the youngest member of the Fed board.

He has recently spoken openly about his doubts of the Fed's controversial policy that pumps $600 billion into the economy through purchases of long-term Treasuries.

That policy is meant to stimulate the economy by keeping interest rates low, but critics argue it could spur inflation to rise too quickly.

In the last speech Warsh gave in November, he said "I am less optimistic than some that additional asset purchases will have significant, durable benefits for the real economy."

That said, Warsh was also considered a close friend and adviser to Bernanke, and never once dissented against a Fed decision. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,031.13 -67.32 -0.39%
Nasdaq 4,581.64 1.37 0.03%
S&P 500 1,996.52 -6.85 -0.34%
Treasuries 2.41 0.06 2.73%
Data as of 1:15pm ET
Company Price Change % Change
Apple Inc 103.31 0.81 0.79%
Bank of America Corp... 16.12 0.04 0.22%
Staples Inc 12.59 0.91 7.79%
Facebook Inc 75.74 0.92 1.23%
Intel Corp 34.46 -0.46 -1.32%
Data as of 1:00pm ET

Sections

The founding CEO of the Washington Post's big rival, Politico, will now be in charge of the Post More

Gas prices are falling to nearly $3 a gallon in some parts of South Carolina, and that will soon be common in much of the country. More

Microsoft is expected to begin showing off Windows 9's features later this month. Here are the expected changes you should be thrilled about. More

The Coolest Cooler is the most successful Kickstarter campaign in the site's history, raising $13.3 million from over 62,000 backers. More

A scam where fraudsters impersonate IRS agents has now stolen $5 million from taxpayers, and this woman - who lost her entire life savings -- is just one of its victims. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.