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

Author

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  • Ehrmann, Michael
  • Tietz, Robin
  • Visser, Bauke

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.

Suggested Citation

  • Ehrmann, Michael & Tietz, Robin & Visser, Bauke, 2021. "Voting right rotation, behavior of committee members and financial market reactions: Evidence from the U.S. Federal Open Market Committee," CEPR Discussion Papers 16213, Centre for Economic Policy Research.
    • Handle: RePEc:cpr:ceprdp:16213
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    2. , & Istrefi, Klodiana & Meier, Matthias, 2023. "Identification of Systematic Monetary Policy," CEPR Discussion Papers 17999, Centre for Economic Policy Research.
    3. Gnan, Phillipp & Rieder, Kilian, 2023. "The (not so) quiet period: Communication by ECB decision-makers during monetary policy blackout days☆," Journal of International Money and Finance, Elsevier, vol. 130(C).
    4. Ehrmann, Michael & Gnan, Phillipp & Rieder, Kilian, 2023. "Central Bank Communication by ??? The Economics of Public Policy Leaks," CEPR Discussion Papers 18152, Centre for Economic Policy Research.
    5. Spandan Banerjee & Rajendra N. Paramanik & Rounak Sil & Unninarayanan Kurup, 2024. "When all speak, should we listen? A cross‐country analysis of disagreement in policymaking and its implications," Economic Notes, Banca Monte dei Paschi di Siena SpA, vol. 53(2), July.
    6. Granziera, Eleanora & Larsen, Wegard H. & Meggiorini, Greta & Melosi, Leonardo, 2025. "Speaking of Inflation : The Influence of Fed Speeches on Expectations," The Warwick Economics Research Paper Series (TWERPS) 1555, University of Warwick, Department of Economics.
    7. Djourelova, Milena & Ferroni, Filippo & Melosi, Leonardo & Villa, Alessandro, 2025. "One Fed, Many Voices: Coordinated Communication vs. Transparent Debate," CEPR Discussion Papers 20636, Centre for Economic Policy Research.
    8. Granziera, Eleonora & Larsen, Vegard H. & Meggiorini, Greta & Melosi, Leonardo, 2025. "Speaking of Inflation: The Influence of Fed Speeches on Expectations," CEPR Discussion Papers 20038, Centre for Economic Policy Research.
    9. Fadda, Pietro & Hanifi, Rayane & Istrefi, Klodiana & Penalver, Adrian, 2025. "Central bank communication of uncertainty," Journal of International Money and Finance, Elsevier, vol. 157(C).
    10. Gnan, Phillipp & Rieder, Kilian, 2021. "The (Not So) Quiet Period: Communication by ECB Decision-makers during Monetary Policy Blackout Days," CEPR Discussion Papers 15735, Centre for Economic Policy Research.
    11. Thomas Lustenberger & Enzo Rossi & Anna Zeitz, 2026. "Central bank communication: New data and stylized facts from a century of Fed speeches," Working Papers 2026-06, Swiss National Bank.
    12. Istrefi, Klodiana & Odendahl, Florens & Sestieri, Giulia, 2023. "Fed communication on financial stability concerns and monetary policy decisions: Revelations from speeches," Journal of Banking & Finance, Elsevier, vol. 151(C).

    More about this item

    Keywords

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    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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