When Do FOMC Voting Rights Affect Monetary Policy?

Vyacheslav Fos and Nancy R. Xu

No 33762, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using 472 FOMC meetings (1969–2019) and the exogenous rotation of voting rights among Reserve Bank presidents, we identify meetings where local economic conditions in voting districts significantly affect the Federal funds target rate (FFR), while those in non-voting districts show no effect. This voting-group effect persists after controlling for national conditions and Greenbook forecasts, implying that actual FFR decisions plausibly deviated from what average information and expectations would have suggested. Distortions are sizable, persistent, and priced into futures and Treasury markets prior to FOMC meetings. We demonstrate these findings using both components of the Fed’s dual mandate: inflation and unemployment rates.

JEL-codes: D7 E5 E58 G10 (search for similar items in EconPapers)
Date: 2025-05
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