Fed Monetary Policy Outlook in 2020: FOMC Voting Changes
What's on this page
Federal Reserve Analysis & News
- 2019 FOMC RECAP
- 2020 VOTING CHANGES
- VIEW ON 2019 RATE CUTS AND 2020 OUTLOOK
2019 FOMC RECAP
At the beginning of 2019, the Federal Reserve had abruptly altered its outlook with regard to monetary policy, having stated that they would act in order to sustain the expansion from previously noting that QT was on autopilot. Consequently, as risks tilted to the downside for the US economy with trade war risks on the rise, Powell and Co. responded with a mid-cycle adjustment entailing three consecutive 25bps rate cuts from 2.25-2.50% to 1.50-1.75%. Alongside this, the Federal Reserve expanded their balance sheet via repo operations in order to boost the supply of bank reserves and place pressure on repo rates.
2020 VOTING CHANGES
The new year will see four regional Fed Presidents rotate into voting spots in January. In turn, this will see Mester (Hawk), Kashkari (Dove), Kaplan (Neutral) and Harker (Neutral) replace Bullard (dove), Evans (Neutral), Rosengren (Hawk, Dissenter) and George (Hawk, Dissenter), making for a slightly more dovish FOMC committee.
VIEW ON 2019 RATE CUTS AND 2020 OUTLOOK
Kashkari: Perhaps the most dovish member in the FOMC, the Minneapolis President had agreed with the Fed’s mid-cycle adjustment, however, prior to the first rate cut, Kashkari had advocated for a 50bps cut in June. For 2020, while Kashkari expects the central bank is done with easing for the time being, he stated that the Fed should not raise rates until core inflation hits its 2% target.
Mester: The Cleveland Fed President stated that she would have preferred the central bank to have not lowered interest rates and instead wanted to see more signs the economy was slowing down.
Kaplan: Had agreed to July and September rate cuts, however, he had been agnostic about a third consecutive rate cut. Regarding 2020, Kaplan expects interest rates to be left unchanged.
Harker: The Philadelphia Fed President agreed with the July rate cut, however, he was not on board with the September and October rate cuts.
Federal Reserve 2020 Meetings
*Meetings that include Staff Economic Projections
FEDERAL RESERVE HAWK-DOVE SCALE
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