Do Local Economic Conditions Influence FOMC Votes?

Bobrov, Anton E.; Kamdar, Rupal; Paulson, Caroline M.; Poduri, Aditi; Ulate, Mauricio

Journal Article

Do Local Economic Conditions Influence FOMC Votes?

Abstract: Monetary policy in the United States is determined by the Federal Open Market Committee (FOMC), a decisionmaking body that includes regional representation. Evidence shows that the economic conditions in their respective regions have influenced how presidents of the 12 regional Federal Reserve Districts voted at the FOMC meetings in past decades. Specifically, a 1 percentage point higher unemployment rate in a District relative to the national average is associated with a 9 percentage point higher probability of dissenting in favor of looser policy during the FOMC vote.