His resignation letter, which was addressed to USA president Donald Trump and was also published by the Federal Reserve, cited "personal reasons" as the cause of his departure. Rate increases are a sign that the economy is improving.
Fischer has been a member of the Fed's Board of Governors since May 2014.
During his tenure at the Federal Reserve, he served as chairman of the Fed's committee on financial stability and the committee on economic and financial monitoring and research, and represented the Fed at global regulatory gatherings.
As Yellen's current term expires in February next year, Trump has also begun the search for the next Fed Chair. Trump has nominated Randal Quarles, an investment-fund manager and former U.S. Treasury official, as Fed's vice chiair of supervision. All nominations to the Board of Governors require Senate confirmation.More news: The Duchess of Cambridge is pregnant with her third child: Kensington Palace
"The resignation of Fed Vice-Chairman Stanley Fischer adds further uncertainty to the already murky outlook for the future of the central bank's leadership", says Royce Mendes at CIBC World Markets.
Trump criticized Yellen's low-interest rate policies during the campaign but has tempered his comments since the election.
"Stan's keen insights, grounded in a lifetime of exemplary scholarship and public service, contributed invaluably to our monetary policy deliberations", Fed Chair Janet Yellen said in a statement. There has been lots of speculation about whether President Trump will reappoint her or if she would accept such an offer.
"That being said, the other most likely candidate for the position is Gary Cohn who would likely continue the gradualist approach to monetary tightening". Prior to joining the faculty at MIT, he was an assistant professor of economics and postdoctoral fellow at the University of Chicago.