A shift in the Federal Reserve's voting panel in 2025 could lead to more resistance against further interest rate cuts. While Fed Chair Jerome Powell has signaled a pause in January, a more hawkish group of regional bank presidents joining the panel may push for a more cautious approach.
Dec 19 (Reuters) - A slightly more hawkish set of Federal Reserve regional bank presidents will become voters on the U.S. central bank's rate-setting panel in 2025, raising the chance that any further interest rate cuts next year could spur more dissents like the one seen on Wednesday from the head of the Cleveland Fed.
Fed Chair Jerome Powell has already signaled a pause in the rate cuts in January, saying on Wednesday that policymakers will move cautiously, with further reductions in borrowing costs contingent on seeing more progress in lowering inflation. But the annual change in the makeup of the Federal Open Market Committee's voting members may add marginally to resistance to additional cuts. 'It opens up the door to more dissenting votes next year,' said TD Securities analyst Oscar Munoz, because the incoming group leans hawkish compared with the outgoing group. All 12 regional Fed presidents discuss and debate monetary policy at each of the U.S. central bank's eight annual meetings, and many have said their status as voter or non-voter has no bearing on their sway around the policy-setting table. Still, while all seven Fed governors and the New York Fed president vote on rates at every meeting, only four of the 11 other Fed regional presidents do, with each getting a one-year turn on a set schedule. This week's rate cut, which capped a full-percentage point of reductions to the Fed's benchmark borrowing rate since September, was already a close call. Four of the Fed's 19 policymakers wrote down projections that show they felt the latest rate cut was not appropriate, and one, Cleveland Fed President Beth Hammack, cast a dissenting vote. Hammack rotates off the voting panel next year. Voting in her place will be Chicago Fed President Austan Goolsbee, whose view that the policy rate will need to fall a fair bit next year to avoid unduly slowing the labor market marks him as decidedly more dovish than Hammack. But two other new voters - S
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