With Yellen due to speak, former Fed Governor says regional Presidents are ignored
There were some interesting comments from former Fed Governor Kevin Warsh in the Wall Street Journal. Eamonn covered them but they bear repeating.
- "I don't think it's terribly well understood" how FOMC meetings are structured"
- While they are portrayed to the public as being genuine deliberations fueled by open conversations, governors and regional bank presidents instead operate from de facto scripts
- Mr. Warsh said that at any given Fed meeting, the FOMC chair enters the room confident of the outcome, knowing he or she has the votes of all members of the seven-seat board of the governors, which are usually enough by themselves to carry any decision the leadership wants.
- Said too much attention is paid to the 12 regional bank presidents ... "The Fed model is largely the model of the dominant chairman," he said. "The media focus on President X was on television...That means less than what most people think."
Another good read ahead Yellen is the preview from Reuters Fedwatcher Jonathan Spicer .
"Interviews with current and former Fed officials suggest that policymakers do not need much more evidence that the economy can withstand a modest initial rate rise by September, long seen as a reasonable time to act," he wrote.
