Fischer, 70, was approved on a 68-27 vote, with all the opposition
coming from Republicans. A separate vote, still unscheduled, must be
held to confirm his appointment as vice chairman of the U.S. central
The Senate could have considered both nominations back-to-back, but
Republicans blocked the more rapid procedure to protest a rules
change that allows Democrats to more easily move President Barack
Obama's nominees, according to a Senate Democratic aide.
Senate Majority Leader Harry Reid likely will move this week to set
a vote on Fischer's vice chairmanship for when the Senate returns
from its Memorial Day recess the week of June 1. Analysts expect he
will be handily confirmed.
But the vote on Wednesday ensures Fischer, the former head of the
Bank of Israel, will attend the Fed's next policy-setting meeting in
mid-June, whether as the No. 2 official or not.
Over a career of academic and policy work, as well as three years as
an executive at Citigroup, Fischer has emerged as a strong advocate
of activist central banking - and particularly of the need to be
aggressive in trying to guarantee financial stability.
At the Bank of Israel, he helped steer Israel's economy through the
global financial crisis with tactics that included stricter control
of mortgage lending and steady intervention in currency markets to
prop up the value of the shekel.
Previously, he had served as a top official at the International
Monetary Fund during the Asian crisis of the 1990s, an experience
that shaped his thinking about the importance of maintaining stable
financial systems and capital markets to avoid broader economic
Fischer will bring that sensibility to a Fed board that is in the
midst of guiding monetary policy out of a historic period of
near-zero interest rates and extensive efforts to stimulate the U.S.
economy with trillions of dollars in asset purchases.
[to top of second column]
During a Senate hearing in March, he broadly endorsed the Fed's
current direction, and indicated he felt there was still ample room
- as Fed Chair Janet Yellen has suggested - to maintain loose
monetary policy to boost employment.
"The mixture that we are seeing coming out of (the) Fed now is
approximately appropriate," he said, backing both the low rates
approach and the Fed's ongoing effort to curtail a monthly
bond-buying program and end it altogether this fall.
The conversation at the Fed, however, is quickly moving beyond the
debate over tapering the purchases to headier issues. In coming
months, policymakers will make critical judgments over new tools for
influencing interest rates and decide when the economy is strong
enough to begin hiking rates.
The rate decision in particular will test Yellen's contention that
the "slack" in the U.S. labor market might not be taken up for
years, and her willingness to let inflation creep above the Fed's 2
percent target if that is needed to bring unemployment down to a
level she considers acceptable.
(Reporting by Howard Schneider and Richard Cowan; Writing by Howard
Schneider; Editing by Andrea Ricci)
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