NEW YORK – The Federal Open Market Committee will hold its first meeting of 2011 on Tuesday and Wednesday in an early test of the balance of power between voting members that support the current level of quantitative easing championed by Fed Chairman Ben S. Bernanke and those who oppose it.
Federal Reserve Bank of Kansas City President Thomas Hoenig, who repeatedly dissented against what he regarded as excessive monetary accommodation as a voting member of the Fed's policymaking FOMC last year, has rotated off the voting panel. However, two similarly-minded presidents have rotated into voting positions – Dallas Fed President Richard Fisher and Philadelphia Fed President Charles Plosser. They seem prepared to take challenge both quantitative easing and the policy of keeping the Fed funds target rate near zero.
The meeting is also significant because projections for gross domestic product growth, unemployment and inflation for the next three years will be determined. The updated forecasts will form the basis of Bernanke’s upcoming semi-annual monetary report to Congress.
The advance GDP report for the fourth quarter will be released Jan. 28. Responding to international trade, analysts have been increasing their projections and some experts predict a surprise to the upside. The report on December durable goods orders is scheduled for release Jan. 27.
