Replacing the Fed’s ’Great Dissenter’

They call him the Great Dissenter. (Well, I do. I came up with it today. It’s not terribly original, really.)

I’m talking about Thomas Hoenig, the Kansas City Federal Reserve President, who cast a dissenting vote eight times last year at U.S. Federal Open Market Committee meetings.

Hoenig is retiring soon and will no longer have a vote at FOMC gatherings this year as part of a regular rotation at the Fed.

He spent the better part of a speech in Kansas City defending his votes. He reiterated the U.S. economic recovery is "sustainable" and "gaining strength." And he repeated his assertion that the Fed’s "emergency monetary policy stance in a recovering market …risks creating a new set of imbalances, or bubbles."

Hoenig also took some indirect shots at his peers who say his dissenting votes have created confusion among investors.

"The idea that a dissenting vote is confusing, counterproductive, and generally undesirable is unhealthy," Hoenig said. He added that the central bank was designed to encourage disparate views.

Who will replace Hoenig’s contrary views on the FOMC among the four incoming regional presidents? Former Fed governor Lyle Gramley thinks Charles Plosser of Philadelphia and Richard Fisher of Dallas are good candidates. Fisher has no aversion to voting against the company line having cast five dissenting votes in 2008.

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