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New York Fed Markets Group Chief Brian Sack to Resign

Brian Sack, markets group chief at the Federal Reserve Bank of New York, is resigning this year after leading operations implementing the central bank’s monetary policy since June 2009.

Sack, 41, will remain at his current post until June 29, the district bank said today in a statement on its website. He will then be placed on leave until his resignation from the New York Fed effective Sept. 14, according to the statement.

As head of the markets group, Sack oversaw the record expansion of the Fed’s balance sheet while policy makers turned to unconventional tools such as two quantitative-easing programs in the aftermath of the credit crisis. Using bond purchases as a stimulus tool, the central bank expanded its assets to a record $2.94 trillion on Feb. 15. The Fed cut its benchmark interest rate to near zero in December 2008.

“Brian’s service to the bank over the past three years has been critical to our response to the financial crisis and the country’s economic recovery,” William C. Dudley, president of the New York Fed said in the statement. “I accepted his resignation with great regret and wish him well.”

Sack succeeded Dudley as markets group chief after working as an economist with Macroeconomic Advisers LLC, where he specialized in Fed analysis. Prior to joining the firm in 2004, he headed the monetary and financial analysis section at the Fed Board’s Monetary Affairs Division.

First Officials

The head of the open market account is one of the first officials to speak at meetings of the Federal Open Market Committee (FDTR), briefing policy makers on market conditions.

Sack directed the execution of the central bank’s second round of quantitative easing, or bond buying, which was dubbed QE2 by analysts and investors. The program, designed to reduce borrowing costs through the purchase of $600 billion in Treasuries, was completed last June. It triggered the harshest political backlash against the Fed in three decades, with Republican lawmakers warning of an inflationary surge.

The markets desk now is pursuing a maturity-extension program announced in September to replace $400 billion of short- term debt with longer-term securities. The so-called Operation Twist is scheduled to be completed in June.

The Fed’s bond buying succeeded in driving down borrowing costs, with the yield on the benchmark 10-year Treasury note falling to a record low of 1.67 percent on Sept. 23. The 10-year note yield fell four basis points, or 0.04 percentage point, to 2.18 percent at 1:30 p.m. in New York, according to Bloomberg Bond Trader prices.

Sack received a Ph.D. from the Massachusetts Institute of Technology in 1997 and a bachelor’s degree from the University of Vermont in 1992.

The New York Fed has “started the search process” to replace Sack, the district bank said in the statement.

To contact the reporter on this story: Caroline Salas Gage in New York at csalas1@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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