#Fed Officials Turn More Hawkish#

The Federal Reserve's 2025 rotating voting members are becoming more "hawkish," raising concerns about the future direction of monetary policy. According to the Fed's website, two "hawkish" voters, one "dovish" voter, and one neutral voter will join the Federal Open Market Committee (FOMC) in 2025. Bloomberg analysis suggests this will lead to a more dispersed FOMC voting stance, with fewer neutral positions and potentially more disagreements. Barron's believes the rotation of voting members could tilt the Fed's decisions toward a "hawkish" stance in 2025. Reuters argues that disagreements among Fed policymakers could resurface over time, especially if the labor market cools faster than inflation. While the increase in "hawkish" voters may not alter policy outcomes, it could heighten the risk of disagreements. The Fed's dot plot released in December 2024 showed a reduction in the number of future rate cuts, with the number of rate cuts in 2025 reduced from four predicted in September to two, and the median interest rate forecast increased from 3.4% in September to 3.9%.