Fischer as Financial Statesman May Help Fed Smooth QE Unwinding

In Stanley Fischer, the Federal Reserve would gain a financial statesman with contacts and credibility around the world as it begins to pull back on record stimulus, possibly unsettling foreign markets.

Fischer, 70, was picked yesterday to be Fed vice chairman just as U.S. officials start to slow bond purchases. The tapering and eventual monetary tightening could roil emerging markets as higher rates here pull investment flows from higher-yielding, higher-risk stocks and debt. Chairman Ben S. Bernanke acknowledged the potential fallout in September, saying, “we are watching those developments very carefully.”