Please note, that this article comes from my archive. Check the actual date in the header.
Good people prefer to stay away from bad things. Every single person has own inside feeling of what is wrong and what is right. Sometimes people manage to find a compromise and balance these two opposite feelings, sometimes they just quit.
Stanley Fischer, Federal Reserve System Vice Chairman announced his resignation last week, staying effective till mid October. He has an impressive list of positions held in his career: Governor of the Bank of Israel, Chief Economist at the World Bank, First Deputy Director of International Monetary Fund, Vice Chairman of Citigroup, several positions as Economics Professor in different Universities.
Stanley Fischer leaves US Federal Reserve Board of Governors three months before Yellen’s term expiration. Even if he did not want to stay till his own contract expiration in June 2018, he could wait till January 2018. It’s normal to change both Chairman and Vice-Chairman positions at the same time. In his letter to US President Donald Trump, Stanley Fischer indicated personal reasons of resignation.
Maybe it’s true. But tell me please, what personal reason could be not to wait three months when you already work three years? And the position is strategically important not just for banking system of one single country, but to the whole financial world.
I suspect that mr. Fischer is disagree with too much politics in monetary decisions. And especially in verbal comments, trying to direct the markets, if not manipulate them. If you listened to Yellen talks before Trump won the election, you would definitely see contrast changes in her talks after. Mr. President did not have his final decision about whether he wanted to see strong or weak US dollar before spring 2017. There was an impression, that he would follow previous Republican Presidents, and use a policy of strong greenback. He listened to his advisers and changed his mind in spring 2017. He often changes his mind if you had not noticed yet. Some members of the FOMC started to use their talks to lower the worldwide reserve currency since then.
Latest example was the speech of Neel Kashkari, President of Federal Reserve Bank of Minneapolis and FOMC member on Tuesday, September the 5th. Here is the quote: “Maybe our rate hikes are actually doing real harm to the economy. It’s very possible that our rate hikes over the past 18 months are leading to slower job growth, leaving more people on the sidelines, leading to lower wage growth, and leading to lower inflation and inflation expectations”.
I’m not an economist of Stanley Fischer’s caliber. So, I will not comment Neel Kashkari’s speech. Stanley Fischer already did.
Please note, that this article comes from my archive. Check the actual date in the header.
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