- Federal Reserve policymakers became divided over how to keep the economy in a healthy place last year.
- That could change in 2020 as the central bank shifts the power of its policy-setting committee.
- Here’s where they stand on interest rates ahead of the next policy meeting in late January.
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When the Federal Reserve began a string of interest rate cuts last year for the first time since the global financial crisis a decade ago, policymakers had become divided over how to keep the economy in a healthy place.
With growing recession fears and escalating trade tensions, some called for more aggressive stimulus measures. Others thought action was unnecessary against a backdrop of historically low unemployment levels and robust consumer activity.
That could change in 2020 as the Fed shifts the power of its policy-setting committee. The leaders of four regional central banks – Chicago, Boston, St. Louis, and Kansas City – will lose votes in 2020 as part of a routine rotation that takes place each year.
Instead, the chiefs of Federal Reserve offices in Dallas, Minneapolis, Philadelphia and Cleveland will vote on the 12-member Federal Open Market Committee. Here’s where they stand on monetary policy ahead of the next FOMC meeting in late January.
Dallas Federal Reserve President Robert S. Kaplan
Kaplan backed the three interest rate cuts made in 2019 but has said that another was unlikely unless the outlook worsened.
“I don’t think we should be making any moves at this point on the Fed funds rate,” Kaplan said in a CNBC interview Friday at the American Economic Association conference. “We’ll keep revisiting that as the year goes on.”
Cleveland Federal Reserve President Loretta J. Mester
- REUTERS/Lucas Jackson
Mester pushed back against the string of interest rate cuts at the end of 2019 but said that it was a tough call to make.
“I would have preferred that we just hold the interest rate where it was and wait for more signs the economy was slowing down more than anticipated,” Mester said at the University of Maryland in November.
Minneapolis Federal Reserve President Neel T. Kashkari
Kashkari is viewed as the most dovish new member of the FOMC. While he has signaled a likely pause in the near-term, he repeatedly called for interest rate cuts last year. He has said the Fed should not increase borrowing costs until inflation hits a 2% target.
Philadelphia Federal Reserve President Patrick T. Harker
- John Lamparski / Contributor
Harker supported the first of three interest rate cuts in 2019 but that was enough for him. He said the following were unnecessary and has advocated for a wait-and-see approach in the past.
“I’m of the mind that we stay put for now and see how things work out,” Harker said at a November event in New York.