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ROBERT SIEGEL, host:

Another key White House adviser is resigning. Allan Hubbard is director of the National Economic Council. And his departure comes at a time of some turbulence in the nation's financial markets.

NPR's Brian Naylor reports from the White House.

BRIAN NAYLOR: Al Hubbard kept a low profile as director of the National Economic Council - a former classmate of the president's when they both were working on MBAs at Harvard. Hubbard helped guide White House policy on issues ranging from entitlement reform to trade. But like many White House advisers recently, he has decided the time is right for leaving.

In his letter of resignation, Hubbard said he will miss the camaraderie of the White House team. That team is undergoing a makeover as several of its key players have left in recent weeks, including political adviser Karl Rove, communications director Dan Bartlett, budget director Rob Portman and Homeland Security adviser Francis Townsend.

Hubbard took his job at the start of the president's second term, at a time when the White House had hoped to make some headway on issues such as overhauling the tax code and creating private accounts for social security. But the White House proposals foundered and then sank. Hubbard's replacement, Keith Hennessey, faces a different challenge - how to keep the economy as a whole from the same fate.

Hennessey was Hubbard's deputy and served the previous two directors in the same capacity. Hennessey takes over the top post as the economy remains mired in a housing slump and a credit crisis that has some economists talking about the possibility of a recession.

The Federal Reserve Board said today that the economy continued to grow this fall, but at a reduced pace. In a speech, Fed governor Donald Kohn said economic uncertainties require, in his words, flexible and pragmatic policymaking. Many on Wall Street interpreted that to mean additional rate cuts could be ahead, which led to a rebound today in the stock market.

Brian Naylor, NPR News, the White House.

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