Renaissance's Neil Dutta on what's ahead for the Fed in 2026 - part 1/2
2025-12-31_22-14 • 5m 14s
John Fortt (Anchor)
00:00.000
While
Powell's
term
doesn't
end
until
May,
the
administration
started
naming
potential
successors
earlier
this
year
with
11
candidates
originally
under
consideration.
Starting
next
year,
four
new
presidents
will
be
voting
members
on
the
FOMC.
Joining
me
now
is
Neil
Dutta,
head
John Fortt (Anchor)
00:16.000
of
economic
research
at
Renaissance
Macro
along
with
our
Steve
Leeman.
Guys,
an
early
happy
New
Year
to
both
of
you.
Neil,
how
dramatic
do
you
expect
this
change
at
the
Fed
to
be?
Neil Dutta (Head of Economic Research & Partner)
00:27.960
Well,
I
mean
typically
um
You
know,
it's
continuity
is
key.
Obviously,
that's
not
what
we're
seeing
right
now
and
it's
unlikely
to
be
the
case.
But
the
one
thing
I
would
just
say,
John,
is
that
if
you
think
the
president
is
just
going
to
be
able
to
put
in
whoever
it
is
he
wants
Neil Dutta (Head of Economic Research & Partner)
00:48.600
and
that
he's
going
to
get
a
dutiful
policy
outcome
as
a
result,
I
would
tend
to
resist
that
approach.
I
do
think
you
do
have
a
lot
of
sort
of
heavy
hitters
coming
into
the
Fed,
particularly
among
the
regional
Fed
presidents,
folks
like
Lori
Logan,
Beth
Hammock,
and
they're
not
Neil Dutta (Head of Economic Research & Partner)
01:03.480
going
to
be
convinced
that
it
makes
sense
to
ease
policy
significantly
on
the
anticipation
of
some
sort
of
economic
golden
age
or
some
kind
of
productivity
boom.
I
don't
think
they're
going
to
be
convinced
of
that.
I
mean,
most
economists
sort
of
take
a
show
me
the
money
type
Neil Dutta (Head of Economic Research & Partner)
01:22.960
approach.
I
mean,
you
can't
just
start
front
running
things
you
have
yet
to
see.
And
there's
a
lot
of
enthusiasm
for
productivity
room,
but
that's
um
that's
not
yet
in
my
opinion
in
the
data.
Okay.
And
they're
going
to
want
to
wait
for
that
before
they
start
doing
anything
about
Neil Dutta (Head of Economic Research & Partner)
01:37.600
it.
John Fortt (Anchor)
01:38.000
Steve
Leesman,
uh
yesterday,
your
your
pencil
was
still
working.
Your
pencil
wasn't
down
yet.
You
weren't
ready
to
share
what
you
thought
was
coming
up.
Have
you
worked
it
out?
Is
your
reporting
done
enough?
Steve Liesman (Senior Economics Reporter)
01:51.200
I'm
I'm
still
working
it
out,
John,
and
it's
still
a
major
question.
I'll
be
reporting
in
depth
on
this
on
Friday
we
decided
because
they
didn't
want
me
not
to
have
to
work
on
the
New
Year's
Day.
So,
you
know,
it's
the
question
being
will
Jay
Powell
stick
around?
He'll
still
Steve Liesman (Senior Economics Reporter)
02:06.840
have
two
years
left
on
his
his
governorship.
Of
course,
term
as
chair
ends
in
May.
But
as
for
expectations,
I
think
it's
really
interesting,
John,
to
look
at
the
Fed
funds
outlook.
And
you
don't
see
a
whole
lot
in
there.
If
you
take
a
look
at
this
chart,
what
what
this
chart
Steve Liesman (Senior Economics Reporter)
02:27.080
tells
is
a
story.
The
story
is
this.
probably
perhaps
Powell
does
one
more
cut
before
he
leaves
in
May.
And
then
a
new
guy
comes
in,
it
will
be
a
guy,
I
can
say
that,
and
probably
cuts
once
more.
And
then
you
see
their
December,
John,
it's
still
a
3%
funds
rate
in
the
futures
Steve Liesman (Senior Economics Reporter)
02:47.320
market.
And
in
fact,
I
don't
show
it
there,
but
if
you
extend
it
to
27,
it's
still
3%.
So
there's
an
expectation
and
this
may
be
picking
up
on
precisely
what
Neil
was
talking
about,
which
is
that
whoever
you
put
in
there,
whomsoever
you
put
in
there,
they
still
have
a
committee
Steve Liesman (Senior Economics Reporter)
03:03.600
to
deal
with.
This
committee
is
still
going
to
be
beholden
to
the
kinds
of
ways
that
they
make
policy
based
on
a
Fed
funds
model
and
their
expectations
for
interest
rates
as
well
as
their
inflation
expectations.
And
that
there's
only
so
much
this
chair
can
do
in
terms
of
being
Steve Liesman (Senior Economics Reporter)
03:20.600
able
to
want
a
policy,
but
not
necessarily
be
able
to
get
that
policy
in
to
effect
because
they
have
to
bring
the
committee
along
and
you
don't
want
a
chair
that's
either
going
to
a
be
Arthur
Burns,
the
famous
Fed
chair
who
gave
us
a
inflation
that
Volker
had
to
vanquish
or
b
Steve Liesman (Senior Economics Reporter)
03:39.600
have
votes
like
7
to
5
or
8
to
4
consistently
with
your
committee
against
you.
Neil,
John Fortt (Anchor)
03:45.960
what
does
the
Fed
do
about
this
case-shaped
economy?
Or
is
there
very
little
that
they
can
do?
I
mean,
it's
this
constant
tug-of-war
between
the
labor
market
and
inflation
concerns,
but
which
way
do
you
go
and
what's
the
key
data
in
the
first
half
of
the
year
that
holds
the
most
John Fortt (Anchor)
04:03.560
sway.
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