Dispersion of FOMC Policymakers: Evidence from Individual Economic Projections with Identities

Natsuki Arai () and Shian Chang ()

No 2025-003, Working Papers from The George Washington University, Department of Economics, H. O. Stekler Research Program on Forecasting

Abstract: This paper analyzes the Federal Open Market Committee (FOMC) policymakers' economic projections with identities published after 2007 and presents three sets of results. First, the dispersion of projections across policymakers is associated with the regional economic conditions they represent and their monetary policy preferences. Second, the policymakers' reaction function is consistent with the Taylor rule and satisfies the Taylor principle for stability. Their projections align with Okun's law and the Phillips curve. Finally, the efficiency evaluations to test the unpredictability of forecast errors and revisions indicate that the efficiency is rejected by many policymakers, with rejections concentrated in the years following the Great Recession.

Keywords: FOMC; Individual Projections; Regional Influence; Policy Preference; Forecast Efficiency (search for similar items in EconPapers)
JEL-codes: C53 E43 E47 E58 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2025-04
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