On December 9, 2025, in Washington, D.C., renovation work was underway on the Marriner S. Eccles Federal Reserve Board Building, the primary office of the Board of Governors of the Federal Reserve System.
U.S. President Donald Trump could announce his nominee for the next Federal Reserve Chair as early as this week and has explicitly stated that his nominee must push for significant interest rate cuts. However, regardless of who is ultimately nominated, the new Chair will face a significantly altered policy-setting committee—one that may exhibit stronger resistance to lowering rates.
At the start of each year, four of the twelve presidents from the Federal Reserve's regional banks rotate into the Fed's influential interest-rate setting committee, serving as voting members for the next eight policy meetings. This year's new voting members are Dallas Fed President Lorie Logan, Cleveland Fed President Beth Hammack, Philadelphia Fed President Anna Paulson, and Minneapolis Fed President Neel Kashkari. The New York Fed President and all seven members of the Fed's Board of Governors in Washington, including the Chair, hold permanent voting rights.
In recent public remarks, both Logan and Hammack have expressed deep concern that inflation has remained above the Fed's 2% target for five consecutive years.
This suggests they are unlikely to support rate cuts in the near term, as such moves could stimulate consumer spending and add further upward pressure on prices.
Fed officials are scheduled to hold their first policy meeting of the year this Tuesday and Wednesday, where they are widely expected to hold interest rates steady.
In December of last year, Fed officials had projected only one interest rate cut for the entirety of 2026.
So-called "Inflation Hawks" Investors and economists refer to central bank officials who support stringent inflation-control policies as "hawks," while those more focused on labor market conditions are labeled "doves." This implies that hawks are less likely to support rate cuts compared to the dovish members of the committee.
The Federal Reserve has a dual mandate from Congress: to stabilize prices and promote maximum employment. However, since the Trump administration introduced a series of large-scale economic policies last year, both objectives have come under threat, complicating the Fed's balancing act.
Although a weakening labor market prompted the Fed to cut rates three times last year, Trump's tariff policies—and potential new tariffs—could push inflation even higher. Consequently, arguments for the Fed to cut rates more than once this year appear less persuasive.
Hammack may emerge as the most hawkish member of this year's committee. In a December 21 interview with The Wall Street Journal, she stated, "Rates can stay at this level for some time, until we have more definitive evidence that inflation is returning to target, or that the labor market is weakening substantially."
She added, "I am highly focused on making sure inflation gets back to target. It's one of our primary goals, and it's critical that we accomplish that."
Logan is also considered a hawk. She indicated that if she had held a vote, she would have opposed the Fed's decision in December to cut rates by 25 basis points for the third consecutive time. In her most recent interview on November 21, Logan noted that "holding rates at the current level for a while can help [the policy-setting committee] more accurately assess" the economic impact of the recent rate cuts.
In December, Kansas City Fed President Jeffrey Schmid and Chicago Fed President Austan Goolsbee had already dissented against the rate cut decision, preferring instead to hold rates steady.
Historically, regional Fed bank presidents, being relatively insulated from political pressure and having direct insight into local economic conditions, are more likely to cast dissenting votes than the governors based in Washington.
The Dove Camp In contrast, Paulson is arguably the most dovish-leaning regional bank president on this year's committee, with her remarks suggesting a greater openness to rate cuts.
In a speech on January 14, Paulson described herself as "cautiously optimistic" about the inflation trajectory. She believes the impact of tariffs will be limited and expects "a reasonable probability that inflation will be close to" the Fed's 2% target by the end of this year.
Paulson stated that she does not anticipate a sharp deterioration in the labor market this year, but that this should not preclude the Fed from cutting rates at least once in 2026.
Paulson said, "I anticipate a gradual decline in inflation, a stabilization of the labor market, and economic growth around 2% this year. If things evolve as expected, then a modest further adjustment to the federal funds rate later this year would likely be appropriate."
Paulson's views align more closely with those of Fed Governors Christopher Waller and Michelle Bowman, but are less aggressive than those of Governor Stephen Milan. Milan has consistently argued that the U.S. economy risks falling into a recession if the Fed does not implement substantial rate cuts.
Kashkari's stance is more neutral. He emphasizes that the Fed's dual mandate continues to face dual threats.
In a January 5 interview with CNBC, Kashkari said, "The risk on inflation is its persistence—the effects of tariffs could take years to fully work through the economy; at the same time, I do see a possibility that the unemployment rate could move up."
Trump has clearly articulated his expectations for the new Fed Chair. Although the President may be able to nominate a heavyweight who shares his desire for rate cuts, the new Fed Chair will hold just one vote on the 12-person policy-setting committee. Future interest rate decisions will ultimately be driven by the objective realities of the economic fundamentals.
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