FOMC vote rotation ‘distorts’ rates – NBER paper
Regional Fed presidents make decisions based on local conditions, research finds
The rotating votes on the Federal Open Market Committee (FOMC) lead to persistent “distortions” in US interest rates, new research finds.
The working paper, published by US non-profit organisation the National Bureau of Economic Research, compares FOMC voting records with levels of inflation and unemployment in the 12 Federal Reserve districts. Five regional Fed presidents have voting rights at any particular time, as well as all the governors of the Fed board.
Authors Vyacheslav Fos and Nancy Xu
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