The seven-member board is down to four members, including Chairwoman Janet Yellen. With one governor, Jeremy Stein, set to leave to return to his academic post at Harvard on May 28, the board faced the possibility that its business would be seriously hampered by the lack of appointees.
The Senate acted this week to eliminate that scenario, voting Tuesday evening to end debate on Fischer's nomination, and voting 69-27 Wednesday to approve him to the board. President Obama nominated the 70 year-old Fischer to fill the Fed's vice chairman's office that Yellen left when she became chairman in January. Wednesday's vote confirms Fischer as a Fed governor, but a separate vote will be held to confirm him as vice chairman.
Analysts had raised a number of concerns about the possibility of the Board of Governors shrinking to just three members. In that case, any two board members would constitute a majority of the board and would have to publish notice ahead of time if they wanted to meet with each other because of transparency laws. Furthermore, the presidentially nominated board members would be a small minority on the Federal Reserve System's monetary policy committee, which also comprises regional bank presidents.
Wednesday's vote ensures that Fischer will be in place at the Fed before Stein departs and before the Fed's June 17-18 monetary policy meeting. Fischer is the former head of the Bank of Israel, Israel's central bank. He also has been a top official at the International Monetary Fund, as well as a senior executive at Citigroup. He began his career as an academic, and taught Ben Bernanke and other future top central bankers at the Massachusetts Institute of Technology.
The Senate did not take action on two other nominees to the board, namely former Obama Treasury official Lael Brainard and current Fed governor Jerome Powell, who is seeking renomination after his term has expired. The Senate is out of session next week, but Brainard and Powell are both likely to be confirmed before the June meeting.