Fed News Friday!November 26th, 2010
Some may consider this good news…
As the end of the year approaches we will see the annual shift in FOMC members for the year 2011. Four new members will make their way into a voting position and among those four voters are 3 inflation hawks, much like our former Rebel of the Week Thomas Hoenig.
Introducing your newest, most important voters for this country, not your Congress people but the new FOMC voting members:
- Philadelphia Fed President Charles Plosser (hawk)
- Dallas Fed President Richard Fisher (hawk)
- Minneapolis Fed President Narayana Kocherlakot (hawk)
- Chicago Fed President Charles Evans (dove)
1-3 have had a history of expressing dissent over stimulus and quantitative easing. There is no telling if they will consistently share the same sentiment when it comes time to ring in a vote for turning the printing press on or off, however the odds are better than they were before.
A little background on how the members of the FOMC are distinguished…
There are 12 voting members at a time for the FOMC. The 7 members of the Federal Reserve Board are permanently voting members while 4 branch Presidents rotate every year from the 12 branches. The President of the New York Bank always sits on the committee.
With the new voting members in place, uneasiness is filling the airwaves on what will happen to Bernanke’s $600 Billion stimulus. In reality, 3 inflation hawks are not going to win over the vote to reverse any of the QE’s of the future. However, their vocal dissent could play a big part in how the Federal Open Market Committee is looked upon. Although Sherry Cooper, chief economist for BMO Financial Group, expresses a very good point:
“The economy will hopefully be in a different place,” Cooper said. “So, they may all be in agreement that it’s time to re-normalize and carry on.”
If you didn’t catch that, I was kidding about her making a good point. Her proposal to just “carry-on” and “re-normalize” is a sure fire sign that she shouldn’t be in the position that she’s in. Oooo was that a bit harsh? Either way keep up with us to track the upcoming voting records of the new FOMC members for the year 2011. Subscribe to our blog!