The Federal Reserve is losing its top bubble-watcher.

Jeremy Stein, an Obama appointee who has served on the Fed's Board of Governors since 2012, submitted his resignation Thursday, effective late May.

Stein, an academic economist before joining the Obama administration and then the central bank, said he would return to his teaching post at Harvard. His term doesn't expire until 2018, but he likely faced the possibility of losing tenure if he didn't return to the school.

In his time at the Fed, Stein provided a focus on financial stability. Amid the Fed's unprecedented efforts to boost the economy with massive purchases of bonds from banks, Stein warned that the down side to that program could be a more risky financial system and the appearance of unstable asset bubbles.

As recently as March 21st, Stein suggested that the Fed should be willing to accept a a slightly slower return to a healthy unemployment rate to avoid a "heightened risk of some sort of adverse financial market outcome."

Those concerns put him on the "hawkish" side of the spectrum of Fed officials, most of whom have said that both high unemployment and low inflation mean the Fed should ease monetary conditions.

Stein's departure potentially raises a staffing problem for the Fed and for the Obama administration because the Board of Governors currently is three members short of its full capacity of seven.

The Senate is in the process considering two new Obama nominees -- the former Bank of Israel governor Stanley Fischer for vice chair, and former Obama Treasury official Lael Brainard for governor. Jerome Powell, a current member of the board, is also nominated for a second term. The candidates must clear the Banking and Finance Committee before being considered by the full Senate, but the committee's chairman, Sen. Tim Johnson of South Dakota, has not yet set a timeline for a vote.

Even if all three candidates are confirmed, that would leave two spots unfilled.

In the past, Obama has been slow to nominate candidates for the board, and Senate Republicans have stalled or blocked some of his candidates.