Barkin Enters Fed's March Confab as Mystery Voter Again on Rates

(Bloomberg) -- As the newest Federal Reserve policy maker prepares to vote again on interest rates, some economists have begun wondering: What is Tom Barkin thinking?

Barkin hasn’t given a speech or an interview, or published his views on the economy or monetary policy, since becoming Richmond Fed president Jan. 1. The Federal Open Market Committee meeting March 20-21 marks his second vote on policy, and it’s a more important one. His economic and interest-rate forecasts become part of the Fed’s public quarterly outlook for the first time.

“You have to let every president get into his job and have a comfort factor,” said Robert Brusca, president of Fact and Opinion Economics, a consulting firm in New York. “But if he is voting he should give the public some idea of what he thinks.”

The views of Fed presidents are especially important now because they outnumber the governors on the FOMC. The Trump administration has appointed two governors, but only one, Randal Quarles, has been confirmed by the Senate. Regional Fed bank presidents outnumber the governors in votes, 5-3. A regional Fed voting majority doesn’t line up with the intent of the Federal Reserve Act which reserves seven seats for governors on the FOMC, giving them a majority.

Turning Point

Barkin’s views would be useful to know because the economy is at a turning point by some measures and there is a debate among economists about whether Fed policy officials will raise their estimate for 2018 rate hikes to four from a median of three at their last forecast round in December.

Richmond Fed spokesman Jim Strader said Barkin is considering public engagement opportunities, but no events are confirmed at the moment.

Barkin voted in the unanimous decision by the FOMC in January to leave rates unchanged. But a vote conveys limited information about an individual’s outlook.

“A recorded vote is not sufficient, because it doesn’t clarify whether someone was fully supportive of the decision or had some significant reservations,” said Andrew Levin, a former Fed economist who is now a professor at Dartmouth College in New Hampshire.

Most other members of the FOMC have been sharing their views before this meeting. Powell delivered congressional testimony within the past two weeks, New York Fed President William Dudley spoke on his outlook Jan. 11 and gave an update on March 1, and Cleveland Fed President Loretta Mester shared her views on the economy and monetary policy Feb. 13.

Still, Barkin isn’t outside the norm of new Fed presidents. Between them, the five most recently appointed regional Fed bank leaders have taken an average of about three months before commenting on the economy or monetary policy.

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