Strategic Forecasting on the FOMC

Peter Tillmann

No 201017, MAGKS Papers on Economics from Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung)

Abstract: The Federal Open Market Committee (FOMC) of the Federal Reserve consists of voting- and non-voting members. Apart from deciding about interest rate policy, members individually formulate regular inflation forecasts. This paper uncovers systematic differences in individual inflation forecasts submitted by voting and non-voting members. Based on a data set with individual forecasts recently made available it is shown that non-voters systematically overpredict inflation relative to the consensus forecast if they favor tighter policy and underpredict inflation if the favor looser policy. These findings are consistent with non-voting member following strategic motives in forecasting, i.e. non-voting members use their forecast to influence policy deliberation.

Keywords: inflation forecast; forecast errors; monetary policy; monetary committee; Federal Reserve (search for similar items in EconPapers)
JEL-codes: E43 E52 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2010
New Economics Papers: this item is included in nep-cba, nep-cdm, nep-for, nep-mac and nep-mon
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Citations: View citations in EconPapers (15)

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Related works:
Journal Article: Strategic forecasting on the FOMC (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:mar:magkse:201017

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