Former NY Fed Pres. Bill Dudley: The idea that Powell is losing control of the Fed is misplaced

Core Viewpoint - The market anticipates a 25 basis point rate cut in the upcoming Federal Reserve meeting, with indications that this is likely to occur [1][2]. Group 1: Federal Reserve's Policy Debate - There is a notable debate within the Federal Reserve regarding the balance of risks to the economy, specifically between inflationary pressures and labor market risks [3][4]. - Some members of the Federal Reserve are leaning towards a hawkish stance, suggesting that the risks may not be as balanced as others believe [2][5]. - The current monetary policy stance is under scrutiny, with discussions on whether it is restrictive or not, influencing the decision on rate cuts [4][5]. Group 2: Influence of Fed Leadership - The influence of a new Fed chair, such as Kevin Hassid, is acknowledged, but it is noted that the chair only has one vote among twelve, limiting their ability to unilaterally change policy direction [10][11]. - The new chair may initially advocate for significant rate cuts but could adopt a more cautious approach once in the role and working with the committee [13]. - The Federal Reserve's decision-making process is complex, and while a new chair can influence discussions, substantial changes in policy require consensus among committee members [11][12]. Group 3: Market Environment and Economic Outlook - The current economic environment is described as challenging, with the Federal Reserve facing difficulties in meeting its dual mandate, leading to uncertainty in economic forecasts [9]. - The lack of recent official economic data contributes to the complexity of the situation, allowing for differing opinions among Fed members [9]. - The ongoing discussions reflect a broader concern about the Fed's ability to navigate the current economic landscape effectively [9][15].