FED
The minutes to the December 2024 FOMC meeting (released at 1400ET) should provide further context for what Chair Powell dubbed a “closer call” but ultimately the “right call” to cut rates by 25bp.Our preview of the December FOMC Minutes is here: (PDF):
- Recall that the meeting brought multiple hawkish surprises, with the Committee’s inflation and rate projections increased by more than expected, a more cautious Statement, and a surprise dissent by Cleveland Fed President Hammack in favor of holding rates.
- A few things to watch:
- How Many Would-Be Holders? Dot Plot indicated not just a median projection of just 50bp of cuts in 2025 (was 100bp previously), but also that 4 FOMC members saw rates remaining unchanged at the meeting. Hammack, and three other non-voting presidents, were likely the four (auguring hawkishly, because two of the other three could well have been KC Fed Pres Schmid and St Louis’s Musalem, both of whom are voters in 2025). Noted hawk and previous dissenter Gov Bowman is not (likely) to be the 4th (given that she voted in favor of a cut), which raises the question of just how close a call it was to ease at the meeting. One of our Instant Answers questions asks whether “several or more” participants could have envisaged holding rates, even if the vast majority ultimately went along with the cut.
- Hawks Fly: As such, we’ve updated our Hawk-Dove Spectrum for the New Year. Most of the Dots have been moved in a more hawkish direction. We now regard Hammack as the FOMC’s biggest hawk, though only marginally over her colleagues Bowman, Schmid and Musalem.
265 words