Earlier this year, on January 10, President Obama nominated Stanley Fischer to be Vice-Chairman of the U.S. Federal Reserve. Fischer was sworn in as a member of the Federal Reserve Board on May 28. Assuming his nomination is confirmed by the Senate this June, he will become second in command behind Fed Chair Janet Yellen, taking over her former position.
Fischer has an impressive resume and diverse background with decades of experience in Financial Economics. Given that Fischer is expected to play an influential role in helping shape U.S. monetary policy at a time when the Fed is winding down its massive bond-buying stimulus, it is a good time to get to know more about Stanley Fischer’s background, experience and range of influences.
Born into a Jewish family in Northern Rhodesia (now Zambia), Fischer holds dual citizenship in Israel and the U.S. When he was 13, his family moved to Southern Rhodesia (now Zimbabwe) where he became active in the Habonim Zionist youth movement. In 1960, he visited Israel and studied Hebrew at a kibbutz. Originally, he planned to study at the Hebrew University of Jerusalem, but instead attended the London School of Economics after receiving a scholarship there. After obtaining his B.S. and M.S. in Economics, he moved to the U.S. to study at MIT, earning his Ph. D. in Economics in 1969.
In the early 1970s, Fischer worked as an associate professor at the University of Chicago. He later returned to MIT where he was a professor there in the Department of Economics. In the late 1970s, Fischer became a central figure in New Keynesian economics, combining the classical theories with the idea that active monetary policy could help in times of economic downturns.
Whether or not you agree with his economics, Fischer’s resume and credentials are indeed impressive. From January 1988 to August 1990, he was a Chief Economist at the World Bank. Then he was a Managing Director with the International Monetary Fund (IMF) from 1994 to 2001, during the time of the Asian crisis of the 1990s. After leaving the IMF, he served as Vice Chairman of Citigroup from 2002 to 2005.
In January 2005, Fischer was appointed Governor of the Bank of Israel by the Israeli cabinet upon the recommendation of then-Prime Minister Ariel Sharon and Finance Minister Benjamin Netanyahu. Fischer became an Israeli citizen in order to assume the role, but did not have to renounce his American citizenship. At the Bank of Israel, Fischer was credited with adeptly steering Israel’s economy through the global financial crisis.
During a Senate hearing last March, Fischer broadly endorsed the current direction of the Fed. He agrees with Yellen’s position that the unwinding of the Fed’s accommodative monetary policies still leaves ample room to fuel economic growth and boost employment. Fischer’s term as governor would extend until January 31, 2020, which is the remainder of Yellen’s term. Fischer is 70 years old and brings to the job what Obama described in nominating him: “one of the world’s leading and most experienced policy minds.”
We are certainly at a pivotal point in Fed history as the Fed continues to taper its economic stimulus. Hopefully, Stanley Fischer’s past background and diverse experience will serve him, and our country, well in his new role.
Bill Gunderson, president of Gunderson Capital Management, has been featured in Fox News, Fox Business TV, Lou Dobbs, Megyn Kelly, David Asman, Barron’s, Bloomberg Radio, Forbes, The Street, Los Angeles Business Journal, Phoenix Business Journal and Yahoo Finance.