The Fed’s FOMC Composition: Who is Hawk, who is Dove?

If one knows the composition of the Fed’s Federal Open Market Committee (FOMC), then it is far easier to guess if the Fed is opting for quantitative easing or not.

Current FOMC voting members and their opinions

In the following we will examine who in the Federal Open Market Committee (“FOMC” or often commonly used “Fed”) is a dove, who a hawk or who a middle/centrist (source WSJ and the following graph from Thompson-Reuters).

 

 

Here Katie Lien’s 2013 update:

Dividing the FOMC into groups

This division into groups comes from Berkeley’s Prof DeLong type pad.

Daedalos: I would start by dividing the potential voting members of the Federal Open Market Committee into several groups. The first group is made up of Elizabeth Duke, Jerome Powell, and Esther George. The second group is made up of Dan Tarullo, Sarah Bloom Raskin, Sandra Pianalto, and Dennis Lockhart. The third group is made up of Eric Rosengren, Charles Evans, and John Williams. The fourth group is made up of Jeffrey Lacker, Charles Plosser, James Bullard, Narayana Kocherlakota, and Richard Fisher. And the fifth group is made up of Ben Bernanke, Janet Yellen, Jeremy Stein, and William Dudley.

The first group are financial-sector worthies with a bias toward inaction and not rocking boats, but willing to go along with strong views from elsewhere on the committee. The second group are those without strong monetary policy opinions of their own who are distressed by the current situation and willing to engage in boat-rocking if they can be convinced it would be constructive.

The third group–Rosengren, Evans, and Williams–think like we do.

The fourth group–it is not at all clear to me right now that the fourth group “think” at all. …

Kurush: OK. I get it. The fifth group?

Daedalos: The fifth group–Bernanke, Yellen, Stein, and Dudley–are, or ought to be, the deciders here. They have deep knowledge of and strong substantive views about monetary policy. They are not reputationally bankrupt and thus gambling for reputational resurrection.

Hence we obtain 5 groups.

1. Bias towards inaction
2. Group that needs to be convinced by others in order to implement easing
3. Strong proponents of easing
4. Hawks
5. The deciders…

The FOMC composition

 

The voting majority of the FOMC consists of the seven votes of the Fed’s board of governors, one permanent member, namely the president of the New York Fed and the four (rotating) votes coming from the other Reserve Bank presidents. The governors are determined by the US president and the US senate, while the five votes rotate each year.

The followings are the voting members of the Fed, their general stance and their opinion uttered as of June 2012.

 

The Board of governors

• Ben Bernanke, Chairman of the board: middle/leaning dove, Group 5 (decider), bio.
• Janet Yellen, Vice Chair of the board: strong dove, Group 5 (decider), Easing yes, opinion, bio
• Elizabeth Duke, board of governors: Group1 (inaction), Middle/leaning dove, opinion: QE3: no, her bio
• Daniel Tarullo, board of governors : dove, Group 2 (to be convinced), bio
• Sarah Bloom Raskin, board of governors:  leaning dove, Group 2 (to be convinced), bio

The following previously two empty seats were filled in 2012, when Obama and the Senate found a compromise between democrats and republicans. Maybe because of the Powell’s support of the debt ceiling in the bipartisan center, the Wall Street Journal takes both Powell and Stein for leaning doves. The Washington Post thinks:

I doubt anyone knows where Powell & Stein are on the hawk/dove spectrum. But both are smart & neither is doctrinaire, which is a good start.

1. Jerome Powell, board of governors, Republican, Group1 (inaction), bio
2. Jeremy C. Stein: board of governors, Democrat, dove, Group 5 (decider), bio

 

In summary the board is currently a bit more dovish than hawkish.

• William Dudley, New York: dove, Group 5 (decider), opinion

Federal Reserve Bank Rotation in the FOMC and Hawks

 

 

Hawks like Kocherlakota (Minneapolis), Fisher (Dallas), Plosser (Philadelphia) (see to the right together with the dove Evans) are neither voting nor non-voting (alternate) members in 2012.

“Committee membership changes at the first regularly scheduled meeting of the year” (source Fed).

 

 

 

 

 

	2012	2013	2014	2015
Members (voting)	Atlanta (middle) Cleveland (middle) San Francisco (dove) Richmond (hawk)	Boston (dove) Chicago (dove) St. Louis (hawk) Kansas City (hawk?)	Cleveland (middle) Philadelphia (hawk) Dallas (hawk) Minneapolis (hawk)	Chicago (dove) Richmond (hawk) Atlanta (middle) San Francisco (dove)
Alternate Members (not voting)	New York VP (?) St. Louis (hawk) Chicago (dove) Kansas City (hawk?) Boston (strong dove)	New York VP (?) Cleveland (middle) Philadelphia (hawk) Dallas (hawk) Minneapolis (hawk)	New York VP (?) Chicago (dove) Richmond (hawk) Atlanta (middle) San Francisco (dove)	New York VP (?) Cleveland (middle) Boston (dove) St. Louis (middle) Kansas City (hawk?)

(source Fed).

Rotating members in 2013

Four votes come from the different Federal Reserves, their composition changes each year, while 5 others are “alternate voting” members, which effectively means that they only are to “squawk” but not to vote.

 

• Eric S. Rosengren, Boston, strong dove, Group 3 (easing proponent), opinion
  
• Charles L. Evans, Chicago: strong dove, Group 3 (easing proponent)
• James Bullard, St. Louis: Group 4 (hawks), leaning dove according WSJ, centrist (Reuters)
  
• Esther George, Kansas City, Group1 (inaction), hawk, successor of hawk Thomas Hoenig
  

 

“Alternate voting” members 

• Christine M. Cumming, First Vice president of New York Fed, Easing ?
  
• Sandra Pianalto, Cleveland: Group 2 (to be convinced), Easing no: her opinion, but she was leaning dove before
• Charles Plosser, Philadelphia: hawk, Group 4 (hawks)
• Richard Fisher, Dallas: hawk, Group 4 (hawks)
• Narayana Kocherlakota, Minneapolis: hawk, Group 4 (hawks)

 

Left FOMC in 2012

• John Williams, San Francisco: dove, Group 3 (easing proponent),   opinion, bio
• Jeffrey Lacker, Richmond: hawk, Group 4 (hawks), Easing no, opinion, bio
• Dennis Lockhart, Atlanta:  Middle/Leaning dove, Group 2 (to be convinced),  Easing yes, opinion

 

Details on Quantitative Easing and the indicators the Fed uses are given here.