The FOMC next meets on December 18-19. This is the last scheduled meeting at which the 2018 rotation of voters among the District Bank Presidents. The rotation will officially remain in place until the meeting of January 29-30, 2019 at which time the next group of voters will take their places.
Among the voting District Bank Presidents, the balance of doves-moderates-hawks will probably tilt marginally more dovish. However, effectively I would anticipate the consensus to remain on the the present gradual path for higher short-term rates.
In 2018, voters were Cleveland’s Loretta Mester (moderate hawk), Richmond’s Thomas Barkin (moderate), Atlanta’s Raphael Bostic (moderate), and most recently San Francisco’s Mary Daly (moderate). The latter three are among the most junior of the serving District Bank Presidents. These aligned with the voting consensus for three rate hikes in 2018 to-date and are expected to do so again at the next FOMC meeting.
In 2019, voters will be Chicago’s Charles Evans (dove), Boston’s Eric Rosengren (moderate), St. Louis’ James Bullard (dove for the moment), and Kansas City’s Esther George (hawk). However, even though Evans has in recent years been among the most dovish on monetary policy and particularly concerned about inflation running too low for too long, his present outlook seems to be consistent with as many as four rate hikes next year. Bullard is unlikely to shift from his framework for low growth, low inflation, and thus continued low interest rates. It is probable that he will dissent in at least a few of the votes next year if his concerns about higher rates choking off the expansion are heightened.
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