Federal Reserve vice chairman Stanley Fischer has resigned effective in mid-October, giving President Trump scope to start reshaping the leadership of the USA central bank sooner than expected and clouding the longer-term outlook for monetary policy.
Fischer's departure comes as U.S. President Donald Trump prepares to reshape the Fed board, which now has three vacancies.
"It has been a great privilege to serve on the Federal Reserve Board and, most especially, to work alongside Chair [Janet] Yellen as well as many other dedicated and talented men and women throughout the Federal Reserve System", Fischer wrote.
Fischer is leaving before his term expires in June next year, and that in effect gives Trump scope to remake the leadership of the Federal Reserve Board.
Quarles' nomination is scheduled to be voted on by the Senate Banking Committee on Thursday.
Fischer, a former governor of the Bank of Israel and vice chairman of Citigroup, leaves the Fed as the central bank confronts the deepening dilemma of United States monetary policy. The two have butted heads over regulatory reform, and her defense of the current regulatory environment in last month's keynote address.
In a note to clients on Wednesday, Paul Ashworth, chief USA economist at Capital Economics, wrote that Fischer's resignation "presumably lowers the odds of [Yellen] being nominated for a second term [as Fed Chair]". "You're talking about a lot of turnover when uncertainty about Fed policy is already high". One potential candidate was Gary Cohn, a former top executive at Goldman Sachs, who now lead's Trump's National Economic Council.
Fed Chair Janet Yellen said Fisher would be missed.
Mr Fischer is a former economics professor at the Massachusetts Institute of Technology. In congressional testimony in March, he endorsed a move being pushed by Republican lawmakers to require the Fed to follow a rules-based approach to setting interest rate policy.