While this week’s Presidential election brought some thrills and excitement at the changing of power at the White House, we will also see some more power shifting at the Federal Reserve in 2017.
Specifically, three new voting governors will take their place alongside Chair Janet Yellen and five others to help frame Fed policy for the next twelve months. As always, they tend to be data dependent, but influence should never be discounted.
The newest members of the FOMC are all first time voters at the table, and they include Neel Kashkari, Patrick Harker and Robert Kaplan.
Neel Kashkari – From the Minnesota Fed, Kashkari was an architect of the treasury rescue plan in 2008/09 of the banks and undersecretary for Henry Paulson. Mr Kashkari is considered a moderate and has wide ranging opinions of Fed policy but generally goes with the mainstream consensus.
Patrick Harker – From the Philadelphia Fed, Harker replaced hawk Charles Plosser a couple years back and is rather moderate comparatively. Mr. Harker earlier this year was a proponent of an aggressive Fed hike policy but has backed off considerably, preferring to be more patient with inflation signals coming in.
Robert Kaplan — From the Dallas Fed, Mr. Kaplan took over for uber hawk Dick Fisher, who’s influence has not made much of an impact. He worked many years at Goldman Sachs and taught classes at Harvard, his opinion is more moderate to dovish as Mr Kaplan believes disinflation to be a major problem and growth challenges should be overcome before being too aggressive with higher interest rates.
The other voting members on the board are a smattering of dovish/neutral representatives — including Chair Yellen, Vice Chair Fischer, Powell, Brainard and Tarullo. In addition, Charles Evans from Chicago will rejoin the board as a voting member, he is generally of a dovish stance.
