Strategic forecasting on the FOMC

Arbeitspapier

The Federal Open Market Committee (FOMC) of the Federal Reserve consists of voting- and non-voting members. Apart from deciding about interest rate policy, members individually formulate regular inflation forecasts. This paper uncovers systematic differences in individual inflation forecasts submitted by voting and non-voting members. Based on a data set with individual forecasts recently made available it is shown that non-voters systematically overpredict inflation relative to the consensus forecast if they favor tighter policy and underpredict inflation if the favor looser policy. These findings are consistent with non-voting member following strategic motives in forecasting, i.e. non-voting members use their forecast to influence policy deliberation.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: MAGKS Joint Discussion Paper Series in Economics ; No. 17-2010

Classification and Topics

• Classification: Wirtschaft ; Interest Rates: Determination, Term Structure, and Effects ; Monetary Policy
• Subject: inflation forecast ; forecast errors ; monetary policy ; monetary committee ; Federal Reserve ; Geldpolitik ; Gruppenentscheidung ; Inflation ; Prognose ; Manipulation ; USA

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Tillmann, Peter
• Event: Veröffentlichung
• (who): Philipps-University Marburg, Faculty of Business Administration and Economics
• (where): Marburg
• (when): 2010

Further information

• Handle: http://hdl.handle.net/10419/56500
• Last update: 10.03.2025, 11:44 AM CET