A slight hawkish rotation as uncertainty on further rate hikes increases
As we enter into the new year, the capacity for the Fed to raise rates next year will be one of the major themes in financial markets next year. So, let’s take a look at who will be on the voting board in making the decisions that will have strong repercussions across the globe starting from 29-30 January next year:
– St Louis Fed, James Bullard (dovish)
– Chicago Fed, Charles Evans (neutral)
– Kansas City Fed, Esther George (hawkish)
– Boston Fed, Eric Rosengren (hawkish)
– Richmond Fed, Thomas Barkin (neutral)
– Cleveland Fed, Loretta Mester (hawkish)
– Atlanta Fed, Raphael Bostic (dovish)
– San Francisco Fed, Mary Daly (dovish)
– Fed Chair, Jerome Powell
– Board of Governors, Richard Clarida
– Board of Governors, Randal Quarles
– Board of Governors, Lael Brainard
– Board of Governors, Michelle Bowman
– New York Fed, John Williams
– St Louis Fed, James Bullard
– Chicago Fed, Charles Evans
– Kansas City Fed, Esther George
– Boston Fed, Eric Rosengren
The most notable change for next year is that we’ll have both the most hawkish and most dovish members of the Fed on the voting board in Esther George and James Bullard respectively. So, they basically cancel out each other as George is adamant on more rate hikes while Bullard resolutely opposes any more to follow.
Aside from that, we’ll have Evans and Rosengren entering the fray as well; both of whom have recently came out in favour of more rate hikes but we’ll only know more from Evans’ stance next year (now that December also saw a hike) as he was erring more to the dovish side in the past.
With much uncertainty still revolving around the Fed’s plans next year and with stocks continuing to tumble, which will result in more tirades by Trump, it’ll certainly be an interesting year to look forward to so expect plenty of scrutiny and attention to be focused on Fed speak next year as well.