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    {
      "speaker": "Phil Adler",
      "startTime": "4.88",
      "endTime": "30.439999",
      "body": "Welcome to the Confluence Investment Management Asset Allocation Biweekly Report for 04/27/2026. I'm Phil Adler. Of what value to investors is a Federal Reserve Board Chairman who is a consensus builder? Confluence Associate Market Strategist and Certified Business Economist Thomas Wash joins us today to tell us we may be about to find out. Thomas, the outgoing chairman of the Federal Reserve."
    },
    {
      "speaker": "Phil Adler",
      "startTime": "30.439999",
      "endTime": "42.454998",
      "body": "Final date still somewhat uncertain as of this recording is, of course, Jerome Powell. How does he compare to previous chairman in building a consensus for board decisions?"
    },
    {
      "speaker": "Thomas Wash",
      "startTime": "42.775",
      "endTime": "65.36",
      "body": "When compared to previous Fed chairs, Powell has been one of the best at achieving consensus on policy. In terms of the number of dissents per meeting, Powell has had the lowest with only two exceptions being Thomas McCabe, who only served only three years, and Mariner Echols. This consensus building ability demonstrates how Powell had a knack for getting everyone on the same page even while the Fed was pushing some of his more controversial policies."
    },
    {
      "speaker": "Phil Adler",
      "startTime": "66.295",
      "endTime": "72.05499",
      "body": "What stands out to you about Powell's consensus building history as Fed chairman?"
    },
    {
      "speaker": "Thomas Wash",
      "startTime": "72.215",
      "endTime": "97.064995",
      "body": "Well, I think the main thing that stands out is his willingness to allow for the freedom of expression. Although there were very few dissents during his tenure, there were clearly a large number of disagreements among members. This is evident in the summary of economic projections which often showed major variations in policy rate expectations and inflation and in Fed speeches where members felt comfortable expressing views on policy that differed from the consensus."
    },
    {
      "speaker": "Phil Adler",
      "startTime": "97.545",
      "endTime": "108.585",
      "body": "Well, while Powell may have engineered many policy changes during his tenure, were there any that were particularly contentious? And if so, how did he manage the moment?"
    },
    {
      "speaker": "Thomas Wash",
      "startTime": "108.905",
      "endTime": "134.735",
      "body": "Well, think I the most notable tension arose when inflation was accelerating and members described the rise as being transitory. While there was some disagreement within the Fed, most members agreed with the direction of policy, both when maintaining rates and when it came time to pivot. So initially, the fear appeared to be labor market related, which led Fed officials to favor keeping rates lower for longer. But as that risk subsided, they moved toward aggressive rate hikes to catch up for lost time."
    },
    {
      "speaker": "Phil Adler",
      "startTime": "135.65001",
      "endTime": "146.61002",
      "body": "As you mentioned, actual dissents have been few at the Fed under Powell's leadership. Do unanimous Federal Reserve Board decisions give investors confidence?"
    },
    {
      "speaker": "Thomas Wash",
      "startTime": "147.25",
      "endTime": "170.92",
      "body": "Well, yes. I I would say so. The lack of dissents help investors accept that while economic data may be volatile, the Fed can be counted on to be decisive. As a result, there was a strong correlation between the end of year thirty day Fed funds future contracts and the ten year treasury yield. The market's reaction suggests that as long as there were no surprises, investors trusted the Fed to be transparent in its policy decisions."
    },
    {
      "speaker": "Phil Adler",
      "startTime": "171.31999",
      "endTime": "185.845",
      "body": "You mentioned being transparent. The board under Powell seemed fixed on transparency, giving clear signals to investors about upcoming rate decisions. Do you expect that to continue under Kevin Walsh, his expected successor?"
    },
    {
      "speaker": "Thomas Wash",
      "startTime": "186.00499",
      "endTime": "208.90501",
      "body": "So, in in my view, I I do expect Walsh to adopt a somewhat less transparent approach simply due to differences in philosophy. Walsh believes that the market has become overly dependent on the Fed for signals and should try to rely on other sources. Consequently, his leadership could pave the way for less frequent communication between the Fed and the public, though any such changes would likely require support from other FOMC members."
    },
    {
      "speaker": "Phil Adler",
      "startTime": "209.305",
      "endTime": "215.225",
      "body": "Bottom line, should we prepare for a future where dissents are more common at the Federal Reserve?"
    },
    {
      "speaker": "Thomas Wash",
      "startTime": "215.78",
      "endTime": "239.82501",
      "body": "Yes. I I would say so. I I think that may be appropriate if inflation continues to remain above the Fed's target. You know, over the last few weeks, some officials have argued that the Fed should be less accommodative given the length of time inflation has remained above the two percent target. However, Walsh has been seemingly pushing the view that rate cuts should be welcome given the supply side pressures on inflation and to account for rising labor productivity."
    },
    {
      "speaker": "Phil Adler",
      "startTime": "240.225",
      "endTime": "247.42001",
      "body": "If investors, Thomas, are less confident about how the Fed may vote, how might they react?"
    },
    {
      "speaker": "Thomas Wash",
      "startTime": "248.14001",
      "endTime": "261.18",
      "body": "In my view, I think if investors are less confident about how the Fed will vote, it will likely lead to some increase in volatility, particularly in long dated securities as investors may require a higher risk premium to account for the loss of certainty."
    },
    {
      "speaker": "Phil Adler",
      "startTime": "261.455",
      "endTime": "270.095",
      "body": "I wonder, will we gradually become less confident about the reliability of the data underpinning Fed decisions?"
    },
    {
      "speaker": "Thomas Wash",
      "startTime": "270.975",
      "endTime": "285.9",
      "body": "It's important to know that the Fed relies on a large amount of data series to make its decisions and as long as they're transparent about what data they're looking at, it should be enough for the market to trust that all of their decisions are gonna be data dependent going forward."
    },
    {
      "speaker": "Phil Adler",
      "startTime": "286.13998",
      "endTime": "294.89502",
      "body": "Is there any way, Thomas, that investors can prepare for this more uncertain future at the Federal Reserve?"
    },
    {
      "speaker": "Thomas Wash",
      "startTime": "295.45502",
      "endTime": "314.99002",
      "body": "I mean, for me, I think it is important to remember that this, you know, policy uncertainty assumes inflation remains above the target. I am confident that a lower inflation reading would restore market confidence in the Fed's ability to normalize rates. However, maintaining limited exposure to long term US securities is likely the best hedge if inflation remains sticky."
    },
    {
      "speaker": "Phil Adler",
      "startTime": "315.72498",
      "endTime": "338.12",
      "body": "Thank you, Thomas. The title of this week's report is the consensus builder, and you can find a link to the written report on the Confluence webpage, confluenceinvestment.com. Our discussion today is based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security."
    },
    {
      "speaker": "Phil Adler",
      "startTime": "338.12",
      "endTime": "341.71997",
      "body": "Our audio engineer is Dane Stole. I'm Phil Adler."
    }
  ]
}