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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 26 mins ago - Politics & Policy

Political consultants pocket taxpayer cash

Illustration: Shoshana Gordon/Axios

Members of Congress are turning to the same political consultants who got them elected to blast out taxpayer-funded communications from their government offices, records show.

Why it matters: While those members are barred from politicking with official funds, the firms have expertise in boosting elected officials' images for political gain and are in high demand for both campaign and government work.

Updated 2 hours ago - Politics & Policy

Omicron dashboard

Illustration: Brendan Lynch/Axios

  1. Health: Transplants rebound from COVID lull
  2. Vaccines: WHO: No evidence that healthy children, teens need boosters — Kids' COVID vaccination rates are particularly low in rural America
  3. Politics: Government website for free COVID tests launches early
  4. World: Greece imposes vaccine mandate for people 60 and older
  5. Variant tracker
2 hours ago - Politics & Policy

Schumer pushes for doomed filibuster changes

Senate Majority Leader Chuck Schumer addresses reporters Tuesday. Photo: Bill Clark/CQ-Roll Call via Getty Images

Senate Majority Leader Chuck Schumer told the Democratic caucus Tuesday night he plans to propose instituting a one-time "talking" filibuster requirement, and bypassing the 60-vote threshold for major legislation, to pass the party's election reforms package via simple majority.

Why it matters: While Schumer acknowledged both votes are expected to fail — and some vulnerable Democrats up for re-election feel it will put them in a tough spot — he argued it's worth putting members on the record for historic legislation.