Fed Governors Not Yet Overwhelmed on Fedspeak

With vacancies on the Federal Reserve Board, the voices of some increasingly hawkish regional Fed bank presidents appear to be having more influence in markets. (See story in today’s Wall Street Journal.) But even though the Washington-based governors can’t out-speak the bank presidents around the nation, they aren’t too far off given their numbers.

Federal Reserve Board of Governors Room

Fed Chairman Ben Bernanke made nine public appearances through speeches or hearings since the last Fed policy meeting at the end of April, more than any other Fed official. Fed Vice Chairman Donald Kohn made five. Including the two leaders, the five current governors made 23 appearances during the period. (Governor Frederic Mishkin, who leaves the Fed at the end of August, made one of those.)

The tally of Fedspeak, compiled by Wrightson ICAP, shows that the 12 bank presidents made 36 appearances through speeches, interviews or testimony since the end of April. Most of them delivered two or three speeches each. The four most hawkish bank presidents — James Bullard of St. Louis, Richard Fisher of Dallas, Jeffrey Lacker of Richmond and Charles Plosser of Philadelphia — made 13 of those appearances combined.

Of course, Fed officials don’t necessarily discuss the economic outlook in each of their speeches. And some talks offer more insight into the path of monetary policy than others. A handful of Fed officials — Mr. Bernanke, Mr. Kohn and New York Fed President Timothy Geithner – by virtue of their positions have more influence over policy than their colleagues. And most of the bank presidents still offered views that were closer to those of the governors than the Fed’s hawks. (Janet Yellen of San Francisco, for instance, made five speeches. That was matched by Mr. Fisher’s five appearances.)

While posing a communications challenge for Mr. Bernanke, the latest circumstances — with a diminished Fed Board — also may challenge markets in interpreting the remarks from across the Fed spectrum. The increasing hawkishness among some bank presidents ultimately may shift the rest of the committee members toward raising interest rates a bit faster than they would’ve otherwise moved. But the dynamics don’t appear to have knocked much influence out of Mr. Bernanke’s hands yet. –Sudeep Reddy