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Fed to Become more Doveish in 2023


New year and new Fed board members. Giving the varying opinions of the different main and alternate members, this annual transition can change the FOMC’s bias and outlook. This could have an impact on the direction of the markets.

  1. It is still a matter of debate as to how high the Fed should go.
  2. Once there, there are widely differing opinions on whether the Fed will hold fast or “pivot”
  3. There is potential for debate about whether inflation and wages will be given more weight by the Fed later in the year.

Powell’s ability to keep a tight ship despite the unprecedented measures taken to combat inflation in the past year is another factor. There have been just two dissenting votes in all the meetings since before the pandemic. Even if more doves do get on the FOMC, it’s also a question of whether they will end up actually voting for a more restrictive policy.

What’s going on

Officially, the FOMC is composed of 12 members, eight of which are permanent. Well, technically 7 are permanent, but the president of the Reserve Bank of New York “rotates” in place. There are often less than 12 Fed vacancies, which can take a while to fill. These changes are reflected in the four…

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