The number of dissenting votes on Federal Open Market Committee (FOMC) policy decisions averaged nearly one per meeting between 2008 and 2013. While the frequency of dissents was not unusual based on historical comparisons, it was unusual that Federal Reserve bank presidents accounted for all of the dissents in those years, according to an article in the latest Federal Reserve Bank of St. Louis Review.1
Daniel Thornton, an economist emeritus, and David Wheelock, a vice president and deputy director of research, both with the St. Louis Fed, examined dissents on FOMC monetary policy votes since 1936, when the FOMC first met in its current form. The FOMC has 12 voting members—the seven members of the Board of Governors and five Federal Reserve bank presidents.2
FOMC meetings occurred more often after 1955 (between 10 and 19 meetings per year), meaning that members had more opportunities to dissent. In the early 1980s, the FOMC began having eight scheduled meetings per year. Focusing on the period 1957-2013, the authors found that only 6 percent (449) of the votes cast for FOMC policy directives were dissents.3 As shown in the first figure below, the frequency varied considerably, ranging from zero dissents (in 2000 and 2004) to 28 (in 1963). The frequency was particularly high during the periods 1962-65 and 1978-80.
The following figure breaks down the number of dissents by FOMC member type. Over the period 1957-2013, Reserve bank presidents dissented 241 times, and Fed governors dissented 208 times. While the number of dissents by governors exceeded the number of dissents by presidents in many years, Thornton and Wheelock noted that presidents have accounted for all but four (72 of 76) dissents between 1994 and 2013.
The authors examined whether governors and presidents differed in their tendency to dissent in favor of “tighter” or “easier” policies. Including the 13 dissents before 1957 brings the total number of dissents to 462 over the period 1936-2013. Of those, the authors classified 249 as favoring a tighter policy, 160 as favoring an easier policy and the remaining 53 as neither.4
Thornton and Wheelock found that Reserve bank presidents more often dissented in favor of tighter policy than easier policy, whereas Fed governors’ dissents were more often in favor of easier policy.
The article provides further analysis on the history of FOMC dissents and reasons for changes in the frequency over time. It examines:
1 Thornton, Daniel L.; and Wheelock, David C. “Making Sense of Dissents: A History of FOMC Dissents,” Federal Reserve Bank of St. Louis Review, Third Quarter 2014. The analysis focuses only on monetary policy votes of the full FOMC.
2 The New York Fed president is a permanent voting member. The remaining 11 Reserve bank presidents serve as voting members on a rotating basis.
3 Before 1957, 13 dissents on FOMC policy votes occurred. All of them were by governors and during the period 1938-40.
4 For the other 53 dissents, either no explanation was provided in the official records or the dissents were based on considerations other than the current stance of monetary policy.