The hawkish faction within the Federal Reserve is growing, with more and more FOMC members unwilling to support a fourth consecutive rate cut.

Following the December rate cut, hawkish sentiment will likely strengthen, with more FOMC members indicating a reluctance to support a fourth consecutive rate cut. Therefore, the Fed is likely to keep rates unchanged in January. The voting composition will also change in January with the rotation of regional Fed presidents, but this is unlikely to have a significant impact on the interest rate trajectory. The dissenting hawks Schmid and Goolsby will be replaced by Beth Hammack of the Cleveland Fed and Lorie Logan of the Dallas Fed, who hold similar positions. The relatively centrist Neel Kashkari and Anna Paulson will also have voting rights in 2026. (Jinshi)