If confirmed, Janet Yellen will preside over a Board of Governors and an FOMC that are “significantly more transparent and innovative” than when Ben Bernanke first joined as governor in 2002, Credit Suisse’s Neal Soss recently wrote to clients.
Bernanke’s Fed was more “democratic and permissive,” resulting in a clearer image of the Fed’s ideological mosaic. Of course, that mosaic will change slightly when new members receive voting power in 2014. From the note:
Two frequent dissenters with stringent anti-inflation views will have votes in 2014 — Charles Plosser (Philadelphia) and Richard Fisher (Dallas). Their positions as voters will more than offset Esther George’s (Kansas City Fed) loss of a vote next year. This year was George’s first term as an FOMC voter, and she has dissented in favour of tighter policy in every policy meeting to date — six so far.
Also moving into voting positions next year will be Narayana Kocherlakota (Minneapolis) and Sandra Pianalto (Cleveland). Once counted among the hawks, Kocherlakota is now one of the most dovish of the district bank presidents. Pianalto, more neutral in her policy leanings, never dissented in her five previous voting terms.
Soss provides his “hawk/dove” scale from September, with the caveat that “one should be cautious in the use of blanket labels to characterise the predilections of Fed officials.”