FOMC Voters 2014 Dove Hawk Scale

The Federal Reserve’s Open Market Committee changes every year and 2014 in particular iss a big year for the Federal Reserve because there are a number of new faces on the Federal Open Market Committee or FOMC. With her official confirmation on Monday, Janet Yellen will become the first woman to lead the world’s most influential central bank. Having served as the Vice Chair of the Federal Reserve since 2010, she is not new to the FOMC but her voice will be heard much louder this year in the highly anticipated quarterly post monetary policy meeting press conferences. Yellen is a vocal dove that puts growth ahead of inflation but actions speak louder than words and her vote to taper asset purchases in December suggests that as Fed Chair, she may not be as dovish.

Every year, the makeup of the Federal Open Market Committee also changes with previous voters rotating out and new voters rotating in. This year’s policymakers have the huge responsibility of determining the pace that asset purchases will be tapered and when Quantitative Easing will end.

Two major doves favoring easier versus tighter monetary policy (Evans and Rosengren), one moderate hawk who favors tighter policy (George) and one centrist (Bullard) will be rotating out of voting positions. They will be replaced by Plosser and Fisher, two major hawks, Pianalto a moderate dove and Kocherlakota, who shares a similar bias as Yellen.

Former Bank of Israel Governor Stanley Fischer has also been nominated to replace Yellen as Vice Chair and if confirmed, another hawk would be added to the roster.

There will also be 2 vacancies this year – Elizabeth Duke’s seat (she retired in summer of 2013) and Sarah Raskin’s slot once she moves over to the Treasury. Jerome Powell’s term ends January 31st but President Obama is considering a reappointment. This would leave the central bank more hawkish and willing to follow Bernanke’s proposal for reducing asset purchases by $10 billion at every meeting this year.

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2014 FOMC Voters

Openly Dovish

New Fed Chair Janet Yellen
Fed Board Member Daniel Tarullo
NY Fed President William Dudley

Minneapolis Fed President Kocherlakota

Moderately Dovish

Cleveland Fed President Pianalto
Fed Board Jerome Powell* (term ends Jan 31 but possible reappointment)

Moderately Hawkish


Fed Board Member Jeremy Stein
Vice Chair Stanley Fischer** (waiting confirmation)

Hawkish


Philadelphia Fed President Charles Plosser
Dallas Fed President Richard Fisher

2 Vacant Slots

Leaving 2014

Fed Chairman Ben Bernanke
(dove)
Kansas City Fed President Esther George (moderate hawk)
St. Louis Fed President Bullard (centrist)
Boston Fed President Eric Rosengren (dove)
Chicago Fed President Charles Evans (dove)

Potential Replacements for Vacant Slots

Lael Brainard, the former Treasury undersecretary is a possible candidate to replace Sarah Raskin’s seat on the Federal Reserve Board of Governors. She stepped down from the Treasury in November and has been known to play a major role in negotiations with China and Europe during the sovereign debt crisis. Brainard is a strong negotiator who pressured European leaders for a more aggressive response to the debt crisis. Thomas Hoenig’s name has been floated around as a possible replacement for Duke. Hoenig is a former Kansas Federal Reserve President who was a vocal hawk during his time at the central bank. Finally Jeremy Stein is expected to step down from the Fed and return to teaching at Harvard in May, which means that he could leave another seat vacant. The Obama Administration will be eager to fill these slots quickly and bring the FOMC back to full capacity.

FOMC Voters 2013 Dove Hawk Scale

The Federal Reserve’s Open Market Committee changes every year and for 2013 in particular, the new makeup of the FOMC will be extremely important because this group will decide whether asset purchases should end in 2013. Gone are Lacker (the most hawkish member of the FOMC), Pianalto (a dove), Williams and Lockhart. Three doves and one hawk will be replaced with two uber doves (Evans and Rosengren), one moderate hawk (George) and one unknown (Bullard). What this implies is that the new voting members of the FOMC may not be as eager to phase out asset purchases this year as the prior committee.

Here is the updated FOMC Voters Dove Hawk Scale for 2013

These new members will have their first opportunity to vote on monetary policy at the January 25th FOMC meeting and here’s where they stand:

Openly Dovish
Chicago Fed President Charles Evans
Boston Fed President Eric Rosengren
NY Fed President William Dudley
Vice Chair Janet Yellen

Moderately Dovish

Fed Board Member Jeremy Stein
Fed Board Member Sarah Raskin
Fed Board Member Daniel Tarullo

Slight Lean towards Dovishness

Fed Chairman Ben Bernanke
Fed Board Member Elizabeth Duke
Fed Board Member Jerome Powell

Slightly Hawkish
Kansas City Fed President Esther George
St. Louis Fed President Bullard

FOMC Voters 2012 Dove Hawk Scale

The Federal Reserve’s Open Market Committee changes dramatically in 2012. Gone are Evans (the most dovish member of the FOMC), Fisher, Plosser and Kocherlakota (the Trio of hawks) and in comes Lacker, Pianalto, Lockhart and Williams. Three hawks and one dove will now be replaced with three doves and one hawk. We can only imagine what this means for monetary policy in the coming year. Every piece of good data will be looked at with skepticism and the central bank as a whole will be more introduce another round of quantitative easing than to normalize monetary policy.

Here is the updated FOMC Voters Dove Hawk Scale for 2012

Jeremy C. Stein and Jerome H. Powell have been nominated by President Obama to fill the 2 vacant seats on the Federal Reserve’s Board of Governors but they still need to be confirmed by the Senate who do not return to business until Jan 23rd.

Here’s where the current voters stand:

Openly Dovish
Cleveland Fed President Sandra Pianalto

Moderately Dovish
NY Fed President William Dudley
Vice Chair Janet Yellen

Slight Lean towards Dovishness
Fed Board Member Daniel Tarullo
Fed Chairman Ben Bernanke
Fed Board Member Elizabeth Duke
San Francisco Fed President John Williams
Atlanta Fed President Dennis Lockhart

Neutral
Fed Board Member Sarah Raskin

Slightly Hawkish
Richmond Fed President Jeffrey Lacker

Here is the FOMC Rotation for the next few years:

Source for both charts is Fixedincomelive.com

FOMC Voters 2011 Dove Hawk Scale

The FOMC rate decision is this afternoon and I have written a number of comments on what to look for and the potential outcome for the first FOMC announcement of the year. The 2 major things to watch are a) the Fed’s assessment of the economy and b) any dissenters. If the Fed upgrades their outlook and one voter inherits Hoenig’s role as the lone dissenter, it would be dollar positive. If the decision to leave rates unchanged is unanimous, we may not see much support for the dollar.

There are four new members on the Federal Reserve Open Market Committee, so I have taken the liberty to update the 2011 FOMC Voting Member Dove Hawk Scale

Here’s where they stand:

Openly Hawkish
Philadelphia Fed President Charles Plosser

Slightly Hawkish
Minneapolis Fed President Narayana Kocherlakota
Dallas Fed President Richard Fisher
Governor Kevin Warsh

On the Fence, Leans towards Easier Policy
Chairman Ben Bernanke
Chicago Fed President Charles Evans
Governor Elizabeth Duke

Slightly Dovish
New York Fed President William Dudley
Governor Sarah Bloom Raskin (cast first vote last year to supprot easing in Nov)
Governor Daniel Tarullo

Openly Dovish
Vice Chairman Janet Yellen

Here is the FOMC Rotation for the next few years:

Source for both charts is Fixedincomelive.com