Thomas Hoenig

Robin Harding

The Federal Reserve Bank of Kansas City has today announced the appointment of Troy Davig as its new director of research.

“Troy Davig has been named senior vice president and director of research. Davig had served at the Bank from 2005 to 2010 in the Economic Research Department. He is rejoining the Bank after serving as senior U.S. economist for Barclays Capital since 2010. As director of research, Davig will act as the Bank’s chief economic policy advisor, provide executive oversight for the Bank’s Economic Research Division and serve as a member of the Bank’s Management Committee, which has responsibility for the Bank’s strategic planning and policy.”

Although low profile, the twelve research directors of the regional Fed banks are very important to monetary policy, especially when the president of the bank is not a macroeconomist. Esther George, who was appointed president in Kansas City last October, is mainly known for her work on bank regulationRead more

Simone Baribeau

Thomas Hoenig, president of the Kansas Fed, fully spread his hawkish wings today. In a speech titled “the high cost of exceptionally low rates,” he called for the Federal Reserve to raise rates to 1 per cent from near zero by the end of the summer.

I have no illusions about the challenges of moving away from zero. But in my judgment, the process should begin sooner to avoid the danger of having to over compensate later, as so often happens in policy.

Dennis Lockhart, president of the Atlanta Fed, didn’t go as far as Mr Hoenig, but took a step toward signaling he would be willing to consider removing the Fed’s “extended period” pledge. “The time is approaching when it will be appropriate to consider recalibrating interest rate policy,” he said, but he did not think that “that time has yet arrived.”

So is the committee becoming more hawkish or are the hawks flying away from the committee? Read more