{"id":239254,"date":"2010-01-27T15:25:17","date_gmt":"2010-01-27T20:25:17","guid":{"rendered":"http:\/\/blogs.wsj.com\/economics\/2010\/01\/27\/the-lone-dissenter-kansas-citys-hoenig-wants-fed-to-find-new-words\/"},"modified":"2010-01-27T15:25:17","modified_gmt":"2010-01-27T20:25:17","slug":"the-lone-dissenter-kansas-city%e2%80%99s-hoenig-wants-fed-to-find-new-words","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/239254","title":{"rendered":"The Lone Dissenter: Kansas City\u2019s Hoenig Wants Fed to Find New Words"},"content":{"rendered":"

The Federal Reserve<\/strong>’s first Federal Open Market Committee<\/strong> meeting of 2010 brought a new voting lineup<\/a> among regional Federal Reserve bank presidents. One hawkish president took the place of another hawk, and the transition appears to have been seamless — bringing a dissenting vote to the committee for the first time in a year.<\/p>\n\n\n\n\n
\"\"<\/td>\n<\/tr>\n
Hoenig<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The FOMC voted 9-1 to keep its interest-rate target unchanged at near zero and maintain its language that economic conditions “are likely to warrant exceptionally low levels of the federal funds rate for an extended period.” That wording has remained in the FOMC’s post-meeting statement since last March.<\/p>\n

The lone dissenter, Kansas City Fed President Thomas Hoenig<\/strong>, “believed that economic and financial conditions had changed sufficiently that the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted,” the statement said.<\/p>\n

Mr. Hoenig knows what it’s like to lead the Lone Dissenter Club. He last dissented in October 2007<\/a> — his second-to-last meeting in the voting lineup before this year — when he wanted the Fed to keep its rate target unchanged, rather than cut by a quarter point. But it’s the first time the FOMC has seen any dissent since Richmond Fed President Jeffrey Lacker<\/strong> almost exactly a year ago<\/a>. Mr. Hoenig was also the Lone Dissenter twice in 2001 and once in 1995, always in the hawkish direction (preferring either no cut or a smaller one than the rest of the committee).<\/p>\n

With today’s move, Mr. Hoenig tied the record for dissents among current FOMC members, according to a tally by Wrightson ICAP<\/strong>. Both Mr. Lacker and Dallas Fed President Richard Fisher have five dissents each.<\/p>\n

It may be a sign of more debate to come this year on the FOMC, which already had been pondering when it should change the “extended period” language. Mr. Hoenig, long known as one of the committee’s most hawkish members, made his position rather clear in his latest public comments.<\/p>\n

\u0093Maintaining excessively low interest rates for a lengthy period runs the risk of creating new kinds of asset misallocations, more volatile and higher long-run inflation, and more unemployment\u0096not today, perhaps, but in the medium and longer run,\u0094 he said earlier this month<\/a>. \u0093Maintaining short-term interest rates near zero could actually impede the recovery process in financial markets.\u0094<\/p>\n

Welcome back, Mr. Hoenig.<\/p>\n

<\/img><\/a>
\n<\/img><\/a><\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

The Federal Reserve’s first Federal Open Market Committee meeting of 2010 brought a new voting lineup among regional Federal Reserve bank presidents. One hawkish president took the place of another hawk, and the transition appears to have been seamless — bringing a dissenting vote to the committee for the first time in a year. Hoenig […]<\/p>\n","protected":false},"author":850,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-239254","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/239254","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/850"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=239254"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/239254\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=239254"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=239254"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=239254"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}