The Federal Reserve Bank of Kansas City is often overlooked by economists and investors as being important in the national economic barometers. That might not be the case this year as Fed President Esther George is now the voice of dissent inside the FOMC’s policy of low-rates (or no-rates) with endless quantitative easing measures. If you look at the graph below, this marks the fifth consecutive month of economic contraction in the region.

Reading the February release from the Kansas City Fed Manufacturing Survey may prompt you to scratch your head about why Esther George is so against the free money and endless asset purchases. The Tenth District survey revealed that manufacturing activity contracted further in February. Also worth noting is that expectations weakened as well. The one positive takeaway is that factory managers showed that capital spending plans for later in the year have improved considerably.

The composite index fell to -10 in February, versus -2 in January. Production fell to -11 from -3 in January. The six-month expectations composite was at 4, versus a previous reading of 7, while the six-month expectations production index was 12 for February, versus 15 in January.

With the region falling for the fifth month, it may seem odd that Esther George is currently the only real hawk voting for tighter or normalized Fed policy. Last year the one vote of dissent was from Jeffrey Lacker of the Richmond Fed District.

The Tenth Federal Reserve District of Kansas City includes all of Kansas, Colorado, Nebraska, Oklahoma and Wyoming. It also includes the western third of Missouri and the northern half of New Mexico.

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