Citation

Discussion Paper Details

Please find the details for DP16213 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: Voting right rotation, behavior of committee members and financial market reactions: Evidence from the U.S. Federal Open Market Committee

Author(s): Michael Ehrmann, Robin Tietz and Bauke Visser

Publication Date: June 2021

Keyword(s): central bank communication, financial market response, FOMC, Monetary policy committee and voting right rotation

Programme Area(s): Monetary Economics and Fluctuations

Abstract: Whether Federal Reserve Bank presidents have the right to vote on the U.S. monetary policy committee depends on a mechanical, yearly rotation scheme. Rotation is without exclusion: also nonvoting presidents attend and participate in the meetings of the committee. Does voting status change behavior? We find that the data go against the hypothesis that without the voting right, presidents use their public speeches and their meeting interventions to compensate for the loss of formal influence; rather, they support the hypothesis that the voting right makes presidents more involved. We also find that speeches move financial markets less in years that presidents vote. We argue that these discounts are consistent with their communication behavior.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=16213

Bibliographic Reference

Ehrmann, M, Tietz, R and Visser, B. 2021. 'Voting right rotation, behavior of committee members and financial market reactions: Evidence from the U.S. Federal Open Market Committee'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=16213