Technical Analysis

What to expect from the next bunch of FOMC voters in 2023?

I reckon the fact that the dot plots revealed that 17 of 19 Fed policymakers are seeing the Fed funds rate exceeding 5% by the end of next year (with no rate cuts projected) says a lot about how unanimous the thinking is at the central bank right now.

As such, even a rotation in FOMC voters for next year is very unlikely to shake things up – at least for the first half of the year, in all likelihood. But let’s still take a look at the who’s who in terms of voting members for this year and the change in the lineup for next year.

In 2022:

The rotating voters are Susan Collins (Boston), Loretta Mester (Cleveland), James Bullard (St. Louis), and Esther George (Kansas City). For next year:

The lineup of the rotating voters will consist of Patrick Harker (Philadelphia), Austan Goolsbee (Chicago), Lorie Logan (Dallas), and Neel Kashkari (Minneapolis).

Meanwhile, the permanent voters will remain the same in the form of Powell, Brainard, Barr, Cook, Jefferson, Waller, Bowman, and Williams (New York).

As much as I want to try and go off tangent to believe that the rotation will result in a meaningful shift in either a hawkish or dovish (one that most are perhaps saying), I don’t think we’ll see much in terms of dissent or stand out views from the Fed until the inflation outlook changes drastically.

In other words, don’t expect dissents to Powell’s leadership to come about too quickly and that will allow him to manage the Fed and market expectations much more easily for at least the first half of 2023.

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