The Federal Reserve on Wednesday said Governor Frederic Mishkin is resigning effective Aug. 31.
Mishkin said in his letter of resignation that he will return to his teaching post at Columbia University's Graduate School of Business.
He joined the Fed board in September 2006 and was filling an unexpired term ending in January 2014.
Mishkin's departure will leave the Fed board with three of its seven seats vacant. President Bush has nominated two people to fill vacant seats and has named Governor Randall Kroszner to serve a full 14-year term, but the Senate has not confirmed the nominations in an election-year standoff.
Mishkin has argued, like Fed Chairman Ben Bernanke, that Fed policy could be bolstered by a stated numerical inflation target.
The Fed last November announced it would issue quarterly forecasts instead of two forecasts a year, and would make projections three years into the future instead of two, but stopped short of setting explicit inflation targets.