UPDATE 9/22: more comments in my print column today 9/21: The Federal Open Market Committee voted again for cheap money at its meeting today, but with an obvious split:
New York and Washington-based governors voted in lockstep with Fed Chair Janet Yellen to keep rates at rock-bottom lows, pleasing investment bankers, global traders, hedge-fund M&A speculators, real estate developers, and others who depend on cheap capital.
But a majority of the voting members among the regional Fed Presidents, who represent districts across the U.S. but hold a minority of the rate-setting seats, this time voted for higher rates, which benefit bank lenders, retirement savers and pensioners.
Switching their votes from the previous Fed meeting to support a rate hike, instead of keeping money cheap, were Loretta Mester, president of the Cleveland Fed (and former chief of the Philly Fed economic research department); and Eric Rosengren, president of the Boston Fed.
Mester and Rosengren joined Esther George, President in Kansas City, who was the only vote for higher rates last time.
The left, as the only regional Fed Presidents still opposing a rate hike was James Bullard, of St. Louis; and New York Fed boss William C. Dudley also voted for cheap money; but New York, with its permanent Fed seat and its big constituency of investment bankers and trade financiers, typically votes with Washington, while most of the support for higher rates in recent years has come from the remaining U.S. regions, who hold seats in rotation.