INSIDE THE FEDERAL RESERVE 105This rotation is important because the regional reserve
bank presidents are divided into “hawks,” who favor tight
money, and “doves,” who favor easy money. The composition
of the FOMC changes every January when four presidents
leave and four new ones join the committee.
This Rubik’s Cube arrangement is temporarily even more
complicated by the fact that there are two vacancies on the
Board of Governors awaiting appointment from President
Obama or confirmation by the Senate. Instead of 12 members
on the FOMC, there are only 10 for the time being, consisting
of five governors and five regional bank presidents. It takes
a majority of the FOMC — six votes for the time being — to
implement policy.
Even the meeting calendar is convoluted. Meetings are not
monthly, but eight times per year, and the dates and months
are not exactly the same from year to year.
Normally, none of this complexity in organization matters
much. All of the FOMC members take their economic guidance
from the Fed staff and work hard to build a consensus view. The
Fed chair is often a dominant personality and has no difficulty
rounding up the votes to pursue his or her desired policies. The
whole process comes down to the wishes of the chairman.
But these are not ordinary times. The composition of the
FOMC and personalities of the individual members matter
much more to you than usual. The December 2014 meeting
of the FOMC produced a 7-3 vote in favor of its policy state-
ment — just one vote more than the bare minimum needed to
pass. The FOMC is far from united at this critical juncture. It is
a house divided.
Two of the December dissents came from Richard Fisher of
Dallas and Charles Plosser of Philadelphia, both super-hawks
unhappy with the Fed’s easy money policies. But Fisher and
Plosser are both gone from the FOMC as of January. They
have been replaced by two super-doves: Charles Evans of the