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Federal Reserve Board Chairman Jerome Powell. Photo: Alex Wong/Getty Images

Statements from Fed governors and regional presidents had often been calibrated based on an individual member's perceived hierarchy within the rate-setting Federal Open Market Committee (FOMC) and their dovish or hawkish leanings. And often they were outright ignored because only the chair's views were seen as important to the market.

Driving the news: But under Jerome Powell, the Fed has bucked that trend. Remarks by FOMC members have been largely in one unified voice. New York Fed President John Williams said Tuesday U.S. interest rates are already about neutral and it would take some sort of shock to raise them. That came days after Fed Gov. Lael Brainard said the U.S. central bank should stop reducing its balance sheet by late this year.

Why it matters: Brainard and Williams appeared with Chairman Jerome Powell in Bloomberg's profile of "The Fed's nucleus" earlier this year, and are both making the case for an even more dovish Fed.

  • But even remarks by FOMC non-voting members like Atlanta Fed President Raphael Bostic have become remarkably indicative of what's to come.

Details: The first sign that there had been a sea change in the Fed's plans for 2019 came from Bostic on Jan. 7 when he projected just one interest rate increase for the year, saying his business contacts seemed less confident about the coming months, and that "clouds" had developed overseas.

  • Those comments were largely ignored at the time — Powell had signaled 2 rate hikes for 2019 at the December FOMC conference just weeks before. But they now look prescient — or calculated.

The big picture: As recently as November, the Fed had clearly articulated a plan to raise interest rates 3 times this year and to reduce its balance sheet by $50 billion a month, on "automatic pilot." That would have pulled U.S. interest rates to 3.00–3.25% and reduced balance sheet holdings to around $3.5 trillion. Those numbers are much closer to normal interest rates and balance sheet holdings throughout the Fed's history.

Be smart: The lower interest rate could be reflective of the lack of inflation currently in the economy, but the increased level of debt held by the Fed on its balance sheet suggests policymakers still feel the need to stimulate what Williams on Tuesday called an economy "in a very good place."

  • That's not how this is supposed to work.

Don't forget: The Fed isn't just holding $4 trillion in U.S. Treasuries and mortgage debt, it's actively buying new debt to replace bonds that mature.

  • In his remarks earlier Tuesday, Williams said he expects the Fed to continue reducing its balance sheet this year.

Go deeper: "No one believes the Fed" on interest rates

Go deeper

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: WHO: AstraZeneca vaccine must be evaluated on "more than a press release."
  2. Politics: McConnell temporarily halts in-person lunches for GOP caucus.
  3. Economy: Safety nets to disappear in DecemberAmazon hires 1,400 workers a day throughout pandemic.
  4. Education: U.S. public school enrollment drops as pandemic persists.
  5. Cities: Surge in cases forces San Francisco to impose curfew — Los Angeles County issues stay-at-home order, limits gatherings.
  6. Sports: NFL bans in-person team activities Monday, Tuesday due to COVID-19 surge — NBA announces new coronavirus protocols.
  7. World: London police arrest more than 150 during anti-lockdown protests — Thailand, Philippines sign deal with AstraZeneca for vaccine.

Tony Hsieh, longtime Zappos CEO, dies at 46

Tony Hsieh. Photo: FilmMagic/FilmMagic

Tony Hsieh, the longtime ex-chief executive of Zappos, died on Friday after being injured in a house fire, his lawyer told the Las Vegas Review-Journal. He was 46.

The big picture: Hsieh was known for his unique approach to management, and following the 2008 recession his ongoing investment and efforts to revitalize the downtown Las Vegas area.

Dan Primack, author of Pro Rata
14 hours ago - Economy & Business

The unicorn stampede is coming

Illustration: Annelise Capossela/Axios

Airbnb and DoorDash plan to go public in the next few weeks, capping off a very busy year for IPOs.

What's next: You ain't seen nothing yet.