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Do FOMC Members Herd?

Jan-Christoph Rülke and Peter Tillmann ()

No 11-03, WHU Working Paper Series - Economics Group from WHU - Otto Beisheim School of Management

Abstract: Twice a year FOMC members submit forecasts for growth, unemplyoment and in ation to be published in the Humphrey-Hawkins Report to Congress. In this paper we use individual FOMC forecasts to assess whether these forecasts exhibit herding behavior, a pattern often found in private sector forecasts. While growth and unemployment forecast do not show herding behavior, the in ation forecasts show strong evidence of anti-herding, i.e. FOMC members intentionally scatter their forecasts around the consensus. Interestingly, anti-herding is more important for nonvoting members than for voters.

Keywords: Federal Open Market Committee; monetary policy; forecasting; herding (search for similar items in EconPapers)
JEL-codes: E43 E52 E27 (search for similar items in EconPapers)
Date: 2010-10
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Published Economics Letters Volume 113, Issue 2, November 2011, Pages 176–179

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Persistent link: https://EconPapers.repec.org/RePEc:whu:wpaper:11-03

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