Federal Reserve Bank of Richmond President Jeffrey Lacker, one of the Fed system’s most outspoken advocates for higher short-term interest rates in recent years, will retire Oct. 1 after 28 years at the bank, the regional Fed bank said Tuesday.

The Richmond Fed’s board of directors has formed a search committee led by Chairwoman Margaret Lewis to find a new president, and has hired the firm of Heidrick & Struggles to assist in the search, the bank said. The bank intends to conduct “a nationwide search to identify a broad, diverse and highly qualified candidate pool for this leadership role,” it said.

Mr. Lacker became the second Fed official to announce his plans to retire in 2017. Atlanta Fed President Dennis Lockhart will step down at the end of February.

“Jeff has been an outstanding leader for the Richmond Fed and has made many contributions to the Federal Reserve System,” Ms. Lewis said in a statement announcing his departure.

A Richmond Fed spokesman said Mr. Lacker wants to return to teaching, writing and academic research, though he had no details on where Mr. Lacker may go after he leaves the bank later this year.

Mr. Lacker joined the Richmond Fed in 1989 and served in various leadership positions before becoming president in August 2004. For the past decade he has anchored the Fed’s hawkish wing, warning of the risks of rising inflation and dissenting often in favor of a higher benchmark federal-funds rate, which officials held near zero for six years following the financial crisis.

He was a voting member of the Fed’s policy committee in 2006, 2009, 2012 and 2015, and dissented a total of 15 times out of 32 meetings.

Mr. Lacker also argued against the Fed’s interventions in financial markets throughout the financial crisis, and has said financial instability was worsened by expectations that the Fed would always provide a backstop for financial firms in trouble.

Over the past year, he has also argued against efforts to overhaul the Fed system, including measures that would subject the Fed’s interest-rate decisions to greater congressional scrutiny or tie its policy to a mathematical formula.

“I’m hoping that our leaders in Congress and the administration understand that our independence is of value and is important to the credibility of the country’s commitment to price stability and I hope they’re willing to proceed accordingly,” he said after the November presidential election.

Mr. Lacker said in a statement Tuesday he felt fortunate “to have participated in some of the most extraordinary policy deliberations in our nation’s history. It’s been my deepest privilege to lead the Richmond Fed and the dedicated people who work here.”

The search to replace Mr. Lacker is likely to face scrutiny from activists and congressional Democrats who have called for more diversity among the Fed’s upper ranks, as well as more openness about how it selects its regional bank leaders.

Following Mr. Lockhart’s announcement last year, the left-leaning Center for Popular Democracy’s Fed Up campaign said it hoped the next Atlanta Fed president would be black or Hispanic, which would be a first for a regional Fed bank.

In an unusual move, a group of African-American House members wrote to Fed Chairwoman Janet Yellen and the chairman of the Atlanta Fed’s board urging them to consider candidates of diverse racial, ethnic, gender and professional backgrounds. The lawmakers also noted that most of the presidents worked at major financial firms before their appointments.

“We hope that candidates from distinctive sectors like academia, labor, and nonprofit organizations are given due consideration,” they wrote.

Before joining the Richmond Fed, Mr. Lacker was an assistant professor of economics at the Krannert School of Management at Purdue University and previously worked at Wharton Econometrics in Philadelphia, the bank said.

The bank posted information about its search process on its website Tuesday.

By Kate Davidson

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