Deutsche Bank has matched anonymous dots from the Fed's September Summary of Economic Projections to individual officials, finding a split between policymakers backing 50 basis points of further tightening and those favoring 75 basis points through 2026 and 2027. Four regional Fed presidents lean toward the more hawkish path this year, while two governors back just one more hike.
Deutsche Bank economists identified four regional Fed presidents — Cleveland's Beth Hammack, Dallas' Lorie Logan, Minneapolis' Neel Kashkari and Kansas City's Jeff Schmid — as leaning toward 75 basis points of total rate hikes in 2026. At the other end, Governors Michelle Bowman and Christopher Waller were identified as projecting only one additional hike this year.
The bank estimated that the remaining 12 officials clustered around the 4.125% median year-end 2026 rate, implying one further hike. Overall, all officials saw some degree of tightening as necessary, and 16 expected additional hikes in 2026, according to the analysis.
The split widens further out
The divide grows sharper for 2027. Deutsche Bank identified eight officials favoring 75 basis points of total tightening through 2027, against six supporting 50 basis points. However, only two voting officials sat in the more hawkish group, while five voters were in the 50-basis-point camp and four voters anticipated some easing in 2027.
Deutsche Bank suggested the Fed could turn somewhat less hawkish next year as some of the more hawkish officials rotate off the voting committee. The bank named Waller, New York Fed President John Williams and San Francisco Fed President Mary Daly as officials who could favor some easing in 2027 after supporting hikes this year.
Center of the committee holds near the median
The median Fed projection for the policy rate remains at 4.125% at the end of 2026, with the September projections indicating a hold through 2027. Deutsche Bank grouped Governor Philip Jefferson, Chicago Fed President Austan Goolsbee and Richmond Fed President Tom Barkin near the center of the committee, broadly aligned with that median path.
The longer-run rate estimate also moved higher: the median rose to 3.2% and the mean to 3.3%, both reaching post-pandemic highs. Deutsche Bank said the move brings the Fed's estimate closer to its own view of a nominal neutral rate in the 3.5%-3.75% range.
Source: Investing.com
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