Reading the Fed: Why the Doves Still Rule

• The media painted the latest Fed announcement as hawkish.

• Eight of twelve policymakers are dovish headed into December.

• Nine of twelve policymakers will lean dovish in 2026.

Most investors hear the Fed. Few actually listen. That’s where the edge is…

I’ll be the first to admit, watching most Federal Reserve officials speak can feel like watching paint dry. The conversation is often bland, tangled in economic jargon, and peppered with awkward jokes. But buried in the mix of data analysis and Johnny Carson-style monologue are clues. The more I listen, the clearer it becomes whether a policymaker leans toward raising or lowering interest rates.

That matters when you're trying to help investors gauge whether the policy outlook will support or weigh on the economy and markets. Easier policy means loans cost less, money flows more freely, and there's more of it to spend on assets like stocks and bonds. Tighter policy does the opposite—borrowing gets pricier, liquidity dries up, and businesses and individuals are forced to raise cash by selling assets.

Last week, after the Fed announced its latest decision, Chair Jerome Powell was asked whether the central bank might cut rates again in December. He gave his usual response: policy isn’t on a preset course, and a rate cut isn’t a foregone conclusion. He also noted there were “strongly differing views” among policymakers. That was clear as one dissented against cutting rates, while another wanted a larger cut. The media took this as a hawkish turn, prompting Wall Street to dial back expectations for a January cut.

But anyone paying attention to the lead-up could’ve seen this coming. Kansas City Fed President Jeffrey Schmid, who opposed the October cut, had already said he saw no reason to ease again. On the flip side, Board Member Stephen Miran, who wanted a deeper cut, had been vocal about his belief that rates need to come way down. Their opposing views weren’t new.

That’s why it’s critical to understand not just how policymakers lean, but who actually gets a vote on the Federal Open Market Committee (“FOMC”) each year. When you combine those two factors, you get a clearer picture of where rates are headed. Based on what I’m seeing, the composition of Fed voters is still dovish through year-end and well into 2026. That should continue to support a steady rally in the S&P 500 Index.

But don’t take my word for it, let’s look at what the data is telling us...

To understand Fed policy, you need to know how the voting committee works. The central bank includes 12 regional presidents and seven board members. But only the board and five regional heads vote each year. Knowing who those 12 are, and how they lean, offers a key clue about policy direction.

The fixed voters are straightforward: the Chair, Vice Chair, and five board members. They vote every year. The regional presidents change annually, but in practice, only four rotate. The New York Fed president always votes due to their role as FOMC Vice Chair. So, those annual switches can swing policy.

Here’s a snapshot of each Fed member, their position, policy leaning (dove, neutral, hawk), and voting status for 2025, 2026, and 2027:

The first thing I want to look at is who the 12 voters are for this year. I’ve noted that by putting a “Y” for yes or “N” for no next to each name. The first thing that jumps out to me is eight voters (two-thirds) lean dovish tendencies. Two are neutral, and two are hawks. That tells me the FOMC is more likely to ease in December than hold steady.

In 2026, the dovish tilt strengthens. Nine voters lean dovish, one is neutral, and two are still hawkish. Again, that points to a Fed inclined to cut rates—assuming conditions allow.

Two other changes in 2026 are worth flagging. Powell’s term as Chair ends in May, though his board seat runs until January 2028. Historically, Fed Chairs step down when their term ends, opening a board seat. Miran’s board term ends this coming January, meaning he’ll need to be replaced.

Both are dovish, with Miran arguably the most aggressive on easing. But given the White House’s push for lower rates, any replacements are likely to lean dovish too.

At the end of the day, a “suddenly hawkish Fed” makes for great headlines and drives plenty of clicks. But based on the makeup of the FOMC and the leanings of its members, the story looks different. The Fed should continue favoring rate cuts through year-end and into 2026. That bias should support economic growth and keep the S&P 500 on solid footing.

If you'd like to see how I'd invest, check out the BentPine Growth Portfolio here. It's up over 18% so far this year and built to last.

Five Stories Moving the Market:

The U.S. Supreme Court appeared skeptical of President Donald Trump’s sweeping global tariffs, as key justices suggested he had overstepped his authority with his signature economic policy – Bloomberg. (Why you should care – the oral arguments appeared to stoke concerns that the U.S. could lose a source of revenue)

Arm Holdings, which provides the most widely used technology in computing processors, gave a bullish revenue forecast, helped by increasing interest in designing chips to run AI data centers; fiscal third-quarter revenue will be about $1.23 billion compared to the expectation for $1.1 billion – Bloomberg. (Why you should care – CEO Rene Haas said revenue for its data-center product has doubled)

Chip designer Qualcomm forecast quarterly sales and profit above market expectations as premium smartphone sales rebounded; however, the company said business with Samsung, a key customer, would drop in the next generation of Galaxy smartphones – Reuters. (Why you should care – despite the Samsung hiccup, Qualcomm said it expects December quarter sales and adjusted profit with a midpoint of $12.2 billion and $3.40 per share, above analyst estimates of $11.62 billion and $3.31 per share)

Federal Reserve Governor Stephen Miran (dove, voter) reiterated he thinks it "would still be a reasonable action" for the Fed to continue cutting interest rates, including at its last meeting of the year in December; Miran said that inflation has come in below expectations and the labor market continues to trend steadily lower – yahoo!finance. (Why you should care – Miran said he and his colleagues see the same ultimate destination, he just wants to get there faster)

U.S. services sector activity picked up in October amid a solid increase in new orders, according to the Institute for Supply Management; however, subdued employment pointed to lackluster labor market conditions – Reuters. (Why you should care – the services sector accounts for the bulk of domestic hiring, likely keeping pressure on the Fed to support economic growth)

Economic Calendar:

Earnings – AKAM, CMI, DD, DDOG, EOG, EXPE, MCHP, MNST, MRNA, NRG, RL, TPR, WYNN

Japan – Wage Income for September

Japan – au Jibun Bank Japan Services, Composite PMI (Final) for October

Germany – Industrial Production for September (2:00 a.m.)

France – Non-Farm Payrolls for 3Q (2:45 a.m.)

Norges Bank (Norway) Monetary Policy Announcement (4:00 a.m.)

Eurozone – Retail Sales for September (5:00 a.m.)

Bank of England Monetary Policy Announcement (7:00 a.m.)

BOE Monetary Policy Meeting Minutes (7:00 a.m.)

U.S. – Challenger Job Cuts for October (8:30 a.m.)

U.S. - Initial Jobless Claims (8:30 a.m.)

U.S. - Continuing Claims (8:30 a.m.)

ECB’s Nagel (Germany) Speaks (8:30 a.m.)

U.S. – Unit Labor Costs for 3Q (8:30 a.m.)

BOE’s Bailey (Governor) Speaks (9:15 a.m.)

Fed’s Barr (Board Member, Voter) Speaks (11:00 a.m.)

Fed’s Williams (New York, Voter) Speaks (11:00 a.m.)

Fed’s Waller (Board Member) Speaks (3:30 p.m.)

Fed's Balance Sheet Update (4:30 p.m.)