Macro of the Week – John Williams takes over NY Fed

In a move that was expected, John Williams will move from the San Francisco Fed president post to take the same position at the New York Fed. He takes over from William Dudley, who late last year announced he would be leaving by mid-2018. The role comes with vice-chairpersonship of the FOMC – the Fed’s rate setting body – and permanent voting rights. Dudley was known as a more ‘dovish’ member of the FOMC, much in the style of Janet Yellen who left the position of Chair of the Fed earlier this year. Williams, by comparison, is considered more of a centrist, although he himself has been labelled as a ‘dove’ in the past. In terms of recent comments regarding interest rates, Williams has not come across as particularly hawkish, seemingly happy with 3 interest rate rises in 2018, which is in line with market expectations. He has, however, been more vocal about the need for the Fed to reduce its bloated balance sheet caused by quantitative easing. With Jerome Powell, who has stated his preference for a Taylor-rule like rate setting process, having taken over as Fed Chair earlier this year, the makeup of the voting members is leaning slightly more hawkish, although at this stage the effect is likely to be marginal.