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Do the Voting Rights of Federal Reserve Bank Presidents Matter?

Author

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  • Fos, Vyacheslav
  • Xu, Nancy

Abstract

Voting seats at FOMC meetings rotate exogenously among Reserve Bank presidents on a yearly basis. Using detailed data on 472 FOMC meetings that took place between 1969 and 2019, we show that when there is a substantial dispersion in inflation across districts, inflation in Reserve Bank presidents' districts affects Federal funds target rates only when those presidents hold voting seats at FOMC meetings. The economic conditions in voting districts are a source of monetary policy shocks, affect Taylor rule regressions, and have a profound effect on financial markets. The path of the target rate would have been different if the economic conditions in all districts affected FOMC decisions.

Suggested Citation

  • Fos, Vyacheslav & Xu, Nancy, 2024. "Do the Voting Rights of Federal Reserve Bank Presidents Matter?," CEPR Discussion Papers 19269, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:19269
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    More about this item

    Keywords

    Monetary policy;

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • G1 - Financial Economics - - General Financial Markets

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