With the FOMC meeting for the first time in 2013 tomorrow, I thought that this would be a good time for an introduction of the new voting members. The Federal Reserve Open Market Committee is a 12 member group comprised of the Chairman of the Federal Reserve, the other six members of the Board of Governors of the Federal Reserve, the president of the New York Federal Reserve, and presidents of four other Federal Reserve Banks, on an annual rotating basis. The presidents of all Federal Reserve Banks, whether a voting member of the Committee or not, attend each FOMC meeting and are allowed to give input.
Jeffery Lacker of the Richmond Fed, Dennis Lockhart of the Atlanta Fed, Sandra Pianalto of the Cleveland Fed, and John Williams of the San Francisco Fed were the rotating voting members for 2012.
Their replacements will be:
Charles Evans, Chicago Fed: Architect of the “Evans Rule,” which changed the quantitative easing of the Fed from a time-based program to an open-ended program targeting unemployment. Considered an extreme “dove” regarding loose Fed policy.
James Bullard, St. Louis Fed: Perhaps the most hawkish of the current FOMC members, Bullard opposed open-ended QE as a non-voting member last year. Very concerned that the Fed will be unable to contain inflation once it gets started, given the massive liquidity that has been injected into the system.
Eric Rosengren, Boston Fed: A big proponent of open-ended QE, he called for “substantial” Treasury purchases by the Fed last year. He believes that high levels of long term unemployment are more damaging than the risk of inflation.
Esther George, Kansas City Fed: The other hawkish member this year, along with Bullard, George feels that the massive purchases by the Fed are feeding imbalances in the market that will cause a greater disruption in the future than would have occurred naturally without Fed intervention.
With two hawkish voices this year compared to Lacker’s lone voice in 2012, it will be interesting to see if the FOMC adopts a less free-wheeling stance on quantitative easing. Depending on the economic numbers, they may gain an ally in Federal Reserve Governor Jeremy Stein, who believes that large scale purchases of Treasuries by the Fed will not help the economy unless companies use the low interest rates to hire workers and expand.
Of the remaining Governors, Janet Yellen is the Governor who supported Evans in his quest to get open-ended QE tied to unemployment implemented. Daniel Tarullo and Sarah Raskin are supporters of QE, and are also allied with supporting Dodd-Frank banking regulation and opposing “too big to fail” banks. This will put them against Elizabeth Duke, who opposes Dodd-Frank and believes that the government should intervene more to boost the housing market. Jerome Powell is a pro-Wall St. Governor, but has made little noise in which way he leans in the QE debate. William Dudley, as president of the New York Fed, is a permanent member of the FOMC and traditional Bernanke ally.
The excellent FOMC profiles supplied by Business Insider were used in this report.