WASHINGTON -- Federal Reserve Governor Jeremy C. Stein plans to step down next month, creating another vacancy on the central bank's already short-handed board.
Stein, 53, a Harvard economist and former Obama administration advisor, has served on the Fed board since May 2012. His resignation will be effective May 28, and he plans to return to teaching at the university, the Fed said Thursday.
Stein was filling the rest of a term that doesn't expire until 2018.
In his resignation letter to President Obama, Stein said serving on the Fed board was a "great privilege."
"During my time here, the economy has moved steadily back in the direction of full employment, and a number of important steps have been taken to make the financial system stronger and more resilient," Stein wrote in a letter released by the Fed.
"There is undoubtedly more work to be done on both dimensions," he said.
But Stein said "much progress" has been made under the leadership of former Fed Chairman Ben S. Bernanke and his successor, Janet L. Yellen.
Stein has been a supporter of the Fed's controversial stimulus efforts, begun under Bernanke.
The seven-member Fed Board already has three vacancies. President Obama has nominated Stanley Fischer, the former president of the Bank of Israel, and Lael Brainard, a former Treasury Department official, to fill two of those spots.
They are awaiting Senate confirmation after a March confirmation hearing.
Fed Gov. Jerome H. Powell also is awaiting a confirmation vote on his renomination after his term expired on Jan. 31. But Powell continues to serve on the board.
All three are expected to be easily confirmed. A committee vote is expected in the coming weeks, and they could be confirmed by the full Senate before Stein departs. But that still would leave two vacancies once Stein leaves.
Yellen said Stein has "served as an intellectual leader" on the Fed board.
"His understanding of monetary policy and markets as well as his expertise in banking and financial regulation has proven invaluable in his service to the Federal Reserve and the country," she said.