FX: Will the balance of the FOMC be broken when the Federal Reserve's "Eagle King" announces his resignation?

      On Thursday (July 13) local time, the Federal Reserve Bank of St. Louis announced on its official website that James Bullard has resigned as chairperson and CEO of the regional Fed.

　　Bullard is scheduled to leave the St. Louis Fed on Aug. 14, 2023, and take up the position of dean of the Mitchell E. Daniels, Jr. School of Business at Purdue University the following day. He will serve in an advisory capacity until Aug. 14 to help ensure a smooth transition for the Fed, the official press release said.

　　The press release also mentioned that effective immediately, Bullard will not participate in the FOMC's monetary policy decisions and other positions, and stop all public speeches. It is understood that Bullard is currently the longest-serving regional Federal Reserve chairperson, and he has not previously hinted at the idea of leaving the bank.

　　The bank's first vice chairperson and chief operating officer, Kathleen O'Neill Paese, has been named interim chairperson and chief executive, and she is expected to replace Brad at the FOMC meeting in two weeks.

　　Brad and the St. Louis Fed

　　Mr. Bullard, 62, is understood to have joined the St Louis Fed as a research economist in 1990 and succeeded William Poole as president of the regional central bank on April 1 2008.

　　"It is a great honor and privilege to have been a member of the St. Louis Fed for the past 33 years, including 15 years as president," Mr. Bullard wrote in the statement. In 2014, Mr. Bullard ranked seventh on a list of economists for influence, ahead of Robert Shiller, the Nobel laureate the year before, and Alan Greenspan, the former Fed chairperson.

　　Since mid-2021, Mr. Bullard has been urging his Fed colleagues to take more aggressive monetary tightening measures to curb the fastest rate of inflation in nearly 40 years, arguing that some people were wrong to believe that "price pressures are temporary" and that he was one of the first officials to call for a big rate rise.

　　Mr. Bullard is considered the most "hawkish" of the 18 current FOMC members, according to last week's update from InTouch Capital Markets. However, it should be noted that Mr. Bullard has voted against four times as a voting committee, except for one "in favor of a larger rate hike" in March last year. The rest are in favor of looser monetary policy.

　　market view

　　David Andolfatto, an economist who worked with Mr. Bullard for many years, was stunned by the latest departure, saying: "Brad doesn't vote against very often, but whenever he disagrees, eventually he's proven right. He's always ahead."

　　Economist Derek Tang points out that Bullard is the sensible representative of the FOMC. He was once a dove, but has recently turned hawkish, and has been a strong advocate for solving the inflation problem in theory. His exit may weaken the hawks who have the voice over, giving some dovish members the upper hand, such as Chicago Fed President Goolsbee.

　　Kathy Bostjancic, chief economist at the National Life Insurance Company, believes that Brad's departure will have very little impact on the direction of interest rates in 2023, only slightly reducing the likelihood of a potential second rate hike because he is not on the rotating committee this year.