This is a surprise:
For immediate release: Roger W. Ferguson, Jr., submitted his resignation Wednesday as Vice Chairman and as a member of the Board of Governors of the Federal Reserve System, effective April 28, 2006. ... He will not attend the March 27-28 meeting of the Federal Open Market Committee. ... Ferguson, 54, was first appointed to the Board by President Clinton to fill an unexpired term ending January 31, 2000. He was then appointed by President Bush to a full term that expires on January 31, 2014. ...
Ferguson is the only Democrat on the Board and his departure will give president Bush the opportunity to appoint all seven Board members. That is not how it was intended to work. One possible hint about the resignation comes from Bloomberg:
The vice chairman had been publicly at odds with Bernanke on announcing a numerical inflation target. Bernanke described such a goal at his Nov. 15 confirmation hearing as a "possible step toward greater transparency.''
Ferguson said in October 2004 that an inflation goal may limit the Fed's flexibility to respond to economic shocks, and two months ago said any progress toward such a change ``would be very slow.'' Edward Gramlich, who resigned as a Fed governor last year, has said their disagreement "never got acrimonious.''
But I'm hesitant to jump to any conclusions on the reasons for the resignation until we know more. Here's the letter: