Entering 2024, interest rate cuts became the key word in the Federal Reserve's policy. At the same time, as we enter the new year, the list of officials who have the right to vote at the Federal Reserve's FOMC meeting will also change.

The Federal Open Market Committee (FOMC) of the Federal Reserve consists of a total of 12 members. It meets 8 times a year to discuss economic and financial conditions and vote to formulate appropriate monetary policies to achieve the tasks of maximizing employment and stabilizing prices.

The seven board members of the Federal Reserve have permanent voting rights during their tenure, and can cast a key vote at every meeting; as the financial center of the United States, New York is the place with the most developed economy and the most active financial activity in the US, so the New York Federal Reserve Chairman can also enjoy permanent voting rights. The remaining 11 regional Federal Reserve presidents share 4 voting rights, which are rotated every year. Officials without voting rights are also required to attend meetings and participate in discussions.

In 2024, in addition to officials with permanent voting rights, the rotating voting committee members are Atlanta Federal Reserve Chairman Bostic, San Francisco Federal Reserve Chairman Daley, Cleveland Fed Chairman Meister, and Richmond Federal Reserve Chairman Barkin. The list of rotating voting committees changes every year, so it also has the greatest impact on voting.

Here are their latest views on monetary policy recently.

Federal Reserve Chairman Powell

Overall, Powell's latest remarks present a cautious dovish stance.

Powell said at a press conference on December 14 that he believes enough has been done in terms of interest rates, but he is not fully confident in this view. He pointed out that the Federal Reserve will not wait until inflation falls to 2% before starting to cut interest rates, because it will be too late. In other words, it is already aware that there may be a risk that interest rates will remain high for a long time, and a recession will seriously affect the decision to cut interest rates.

More directly, he publicly stated that he believes policy interest rates have reached or are close to their peak, interest rate cuts are already in sight, and policymakers are thinking and discussing when it is appropriate to cut interest rates. However, in order to avoid being too dovish, he also said that it is still focusing on whether interest rates are high enough. If appropriate, the Federal Reserve is still ready to further tighten its policy.

New York Federal Reserve Chairman Williams

As the “top three” of the Federal Reserve, Williams publicly stated that “it is still too early to consider interest rate cuts now” and “it is too early to consider interest rate cuts in March next year” immediately after Powell released a signal of interest rate cuts, which is a drop of “ice water” in anticipation of the market's interest rate cuts.

In an interview with CNBC on December 15, he said, “We're not really discussing interest rate cuts. It's still too early to consider cutting interest rates in March. The question is whether we have adjusted our monetary policy to a restrictive enough position to ensure that inflation falls back to 2%.” His position is very hawkish.

Federal Reserve Governor Waller

Waller's views changed quite drastically around the end of November. On November 29, Waller, who was generally hawkish, said that he is “increasingly confident” that the Federal Reserve's current interest rate level will be enough to push inflation down to 2%. At the same time, he acknowledged that if efforts to reduce inflation continue to make progress, it is possible to cut interest rates in a few months. He said that if inflation continues to fall, we “have no reason” to insist on keeping interest rates “very high.”

Meanwhile, in mid-October, he also insisted that “no one expects interest rate cuts in the near future,” and even said, “We are still likely to raise interest rates again; whether and when to raise interest rates will be entirely data-driven.”

Federal Reserve Vice Chairman Jefferson

Jefferson's most recent statement was as early as November 14. At that time, the Federal Reserve had yet to release the latest economic forecast summary and bitmap, so it seems that his views may be lagging behind. At the time, he believed that the persistence of inflation was still uncertain, and therefore might require a stronger policy response than in other situations. He also pointed out that some indicators that measure economic uncertainty, especially inflation, have risen.

Federal Reserve Supervisory Vice Chairman Barr

Barr delivered a public speech on December 19, saying that it is expected that inflation will cool down further, but it is still the focus of the Federal Reserve's work. If inflation continues to fall, the Federal Reserve will respond, so he will continue to look for signs that inflation will return to the target. He also specifically indicated that the Federal Reserve will have more information in the first half of 2024.

Federal Reserve Governor Bowman

Bauman's latest speech was on November 29th, and can only be used as a reference. She said at the time that if progress continues to be made in reducing inflation, interest rate cuts can begin in a few more months.

Her basic expectation of the economic outlook at the time was still that further interest rate hikes were needed to maintain sufficient policy restrictions and reduce inflation to the 2% target in a timely manner. She pointed out that if future data shows that progress in inflation is stagnant or insufficient and falls to 2% in a timely manner, she is still willing to support interest rate hikes. Bauman's views are hawkish, but over the past month, her views may have changed. We'll stay tuned for her next public statement.

Federal Reserve Governor Cook

Cook's public statements about monetary policy are rare, but she said on November 17 that the Federal Reserve's interest rate hikes and balance sheet cuts have tightened financial conditions in the US and helped reduce inflation, and that the simultaneous tightening of policies by central banks around the world may mean that each central bank needs to do less.

Federal Reserve Governor Kugler

In response to the senator's letter on November 17, Coogler said that it is currently unclear how long the Federal Reserve's balance sheet reduction process will continue, but it may not end soon. According to Kugler, the size of the balance sheet may decline further sharply until reserves reach a level consistent with the sufficient reserve operating framework.

Atlanta Fed Chairman Bostic

On December 20, Bostic said that the Federal Reserve cannot wait until the inflation rate reaches 2% to cut interest rates; otherwise, inflation will be “overadjusted”; this is the strategy behind cutting interest rates. He also said that interest rates are expected to be cut twice in the second half of 2024. Although this is less than the bitmap and market expectations, he is one of the few dovish officials who would directly expect the number of interest rate cuts.

He believes that the Federal Reserve can achieve a soft landing because the Fed has a way to solve the problem of inflation without causing much pain to the labor market. However, he also pointed out that the fight against inflation still has some way to go.

San Francisco Federal Reserve Chairman Daly

On December 19, Daly pointed out that the Federal Reserve may need to cut interest rates three times in 2024. He is the most dovish official so far. She said that if inflation continues to fall, the Federal Reserve should work to minimize disruptions in the job market, so it may be necessary to cut interest rates next year to prevent excessive austerity.

She pointed out that the recent decline in inflation is demand-driven, indicating that “substantial” progress has been made in falling inflation.

Cleveland Federal Reserve Chairman Mester

Mester pointed out on December 18 that the market's expectations for interest rate cuts are “slightly ahead” of the Federal Reserve, and the key to the next stage is how long monetary policy will need to be tightened. Meister has always been a more hawkish official.

She refuted expectations from the outside world, arguing that the question for the next stage is not when to cut interest rates, but rather how long they need to keep monetary policy tight to ensure that inflation is sustainable and returns to 2% in a timely manner. She added that the market was a bit ahead of schedule, and they skipped to the last part where “the Federal Reserve will quickly normalize,” and that was not what she expected.

Richmond Fed Chairman Barkin

Barkin hinted on December 19 that if inflation continues to fall, the Federal Reserve will start cutting interest rates. He said that although inflation is still the focus of the Federal Reserve's attention, it has made good progress and has been moving in the right direction, so the next step is to focus on the balance between the two responsibilities — that is, pay attention to employment performance. His statement was also dovish.

In an interview, he said that if the Federal Reserve believes that inflation will fall steadily, it will of course respond appropriately. He looked forward to the “consistency and breadth” of inflation data over the next few months, adding that he believes labor demand and inflation are normalizing. Barkin said he wouldn't assume what results the data would bring. His opinion is that inflation is more stubborn than generally expected, but he hopes he is wrong.

summed

Overall, among officials with permanent voting rights, Waller's attitude clearly changed to “pigeon,” while in the 2024 rotating voting committee, the “pigeon” sound seemed even louder. Entering the year of interest rate cuts, such a “hawk pigeon combination” may make the Federal Reserve more comfortable.