Fed's No. 2 official stepping down in October

How the Federal Reserve works
How the Federal Reserve works

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.

The resignation means Trump will get to nominate candidates this fall for the Fed's top two jobs, putting his stamp on the central bank. Yellen's term expires in February. Fischer's was set to expire in June.

In his two-paragraph letter to the president, Fischer hailed the U.S. economy's progress and the Fed's reforms to make the financial system more resilient.

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

Fischer has been highly influential at the Fed. Before the central bank started raising interest rates in late 2015, he was a key figure in the Fed's communication to the public and investors. Markets sometimes moved on his comments.

Related: Fed keeps interest rates steady amid inflation

Fischer, who was born in Zambia and educated in London, was nominated to the Fed by President Barack Obama after serving as the governor of the Bank of Israel from 2005 to 2013. Before that, he was vice chairman at Citigroup.

At MIT in the 1970s, Fischer taught both Ben Bernanke, who decades later became Fed chair, and Mario Draghi, now the president of the European Central Bank.

Besides Yellen and Fischer's seats, there are already two open spots for Fed governors, who get a permanent vote on the influential committee that raises and lowers interest rates. Trump has nominated Randal Quarles, a former investment fund manager, to a fifth opening in the Fed's governor ranks. If confirmed, Quarles would lead the Fed's regulatory supervision of Wall Street banks.

The Fed is expected this fall to begin unloading $4 trillion of debt that it racked up during the financial crisis to keep interest rates low and stimulate economic growth.

Since December 2015, the Fed has raised rates four times, including this March and June. Before that, Fed officials hadn't voted for a rate hike in nearly a decade. Rate increases are a sign that the economy is improving.

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