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Updated Feb. 24, 2017 A Timeline of “No” Votes Dissent: No Stranger in the History of the FOMC And Significant Events in U.S. and History Number of Dissents by Year Unemployment hits at least 7% Inflation hits at least 10% Unemployment and inflation shown since the late 1940s. AGREE AGREE AGREE AGREE 1933 Congress establishes the FOMC, DISSENT 1934 to be made up of representatives DISSENT from all 12 Federal Reserve banks. AGREE 1935 AGREE AGREE AGREE AGREE 1936 AGREE Congress adds the Fed’s Board 1937 of Governors to the FOMC.

FEDERAL RESERVE 3 1938 8 1939 , which started in 1929, ends. World War II begins. 2 1940 1941 1942 The Federal Reserve pledged to cooperate fully with the Treasury 1943 Department to finance the war e’ort. 1944 1945 WW II ends. The Federal Reserve’s Federal Open Market Committee (FOMC) is our nation’s chief monetary policymaking body. 1946 It is made up of Federal Reserve governors (in Washington) and presidents 1947 (across the country). The FOMC uses a variety of tools to influence financial conditions in the economy. 1948

1949 Fed-Treasury Accord is drawn up, The goals are maximum employment, stable prices and moderate long-term interest rates for the country. 1950 Korean War begins. enabling the Fed to redirect open Often, the members of the committee are unanimous in their support for a policy. market policy toward macro goals, 1951 But dissenting votes are cast—more than 450 over three-quarters of a century, with an uptick in the past several years. such as low inflation and maximum 1952 employment. What prompts a dissent? Have such votes been more common in one era or another? 1953 Armistice declared in Korean War. Is one type of member more likely than another to dissent? 1954 FOMC starts to meet every three to four 1955 weeks instead of just four times per year. 1956 The full committee starts voting on the operating Dissents by Reserve Bank Presidents and by Fed Governors 1957 directive to the manager of the open market account. 1958 Early 1960s—FOMC drops its policy of conducting 1959 20 open market operations solely in Treasury bills. 1960 1961 Vietnam War begins for the U.S. 1962 15 1963 1960s and 1970s—More and more, there is disagreement on the committee about the causes and costs of inflation, 1964 Reserve Bank Presidents as well as whether there really is a tradeo’ between 1965 inflation and unemployment. Some members begin to Federal Reserve Governors press for policy to be based not on short-term interest 1966 rates, as had been the case, but on monetary aggregates. 10 12 1967 1968

1969 1970s—St. Louis Fed cements its reputation 1970 as a maverick, which it acquired for supporting policy based on monetary aggregates. 5 1971 1972 1973 U.S. pulls out of Vietnam. 1974 President Nixon resigns. 0 1975 FOMC inaugurates annual targets for 1976 2011 1981 1957 1975 1972 1978 1987 1993 1938 1939 1963 1969 1999 1996 1966 2016 2014 1984 1990 1960 1940 2002 2005 2008 the growth rates of money stock measures. 1977 Congress amends the to spell out the “dual mandate” for the Fed. Analysis of FOMC dissents has only just begun. Although some the president of the U.S. and approved by the Senate. Some 1978 patterns can readily be seen, explanations of those patterns researchers argue that governors are, thus, more responsive to 1979 Iran hostage crisis begins. will require further research. One pattern shows that Reserve the desires of politicians (who must consider re-election) and, 1980 Early 1980s—FOMC’s schedule 1981 changes to eight meetings a year, bank presidents have tended historically to dissent more often thus, favor lower interest rates and unemployment rates in where it stands today. for tighter policies (lower inflation) and governors for easier the short run even at the cost of higher inflation (and perhaps 1982 1983 policies (lower unemployment). This could reflect differences higher interest rates and unemployment) over the longer run. FOMC begins to include information in its in how presidents and governors are chosen. Presidents are In contrast, Reserve bank presidents may have stronger 1984 directive about the likely direction of future changes in policy. appointed by their local boards of directors (with Board of preferences for low inflation and, thus, generally tighter 1985 Governors approval), whereas governors are appointed by monetary policy than do governors. 1986 begins in mid-1980s. 1987 1988 Number and Frequency of Dissents Direction of Dissents 1989 under FOMC Chairs, 1936-2016 by Member Type, 1936-2016 1990 1991 Gulf War 1992 Total Dissents Chairs Tenure Dissents per 1993 Meeting 1994 37 Marriner Nov. 15, 1934- E 1995 Between 1957 and 2013, the number of 13 0.23 A Eccles April 15, 1948 69 S dissents per meeting was somewhat higher I 1996 E during years with unusually high inflation or Thomas April 15, 1948- R 0 0.00 1997 unemployment rates, but the relationship McCabe March 31, 1951 between economic conditions at the time 125 1998 and dissents was not strong. See article

William R 1999 in the 2014:Q3 issue of the Review at

April 2, 1951- E McChesney 137 0.51 T

Jan. 31, 1970 190 http://research.stlouisfed.org/publications/ H 2000

Martin Jr. review. G

I T 2001 9/11 Arthur Feb. 1, 1970- 63 0.62 Burns March 7, 1978 2002 2003 G. William March 8, 1978- The zero lower bound is met for the 27 1.42 Miller Aug. 6, 1979 2004 rate target. Unconventional monetary policies draw criticism from 2005 Paul Aug. 6, 1979- Tighter 62% | Easier 38% some FOMC members. 92 1.23 Volcker Aug. 11, 1987 President 54% | Governor 46% 2006 For the first time, Alan Aug. 11, 1987- In addition to the dissents shown above, there were 59 others that 2007 Financial crisis and Great begin. 82 0.54 press conferences Greenspan Jan. 31, 2006 couldn’t be classified as being for either tighter or easier policy. 2008 become a regular Records either provide no reason for the dissent or indicate that event after some Ben Feb. 1, 2006- 2009 o‰cially ends. 48 0.73 the dissent was cast because of disagreement with language in FOMC meetings. Bernanke Jan. 31, 2014 the FOMC directive or statement concerning possible future policy 2010 actions. For example, sometimes a president or governor would 2011 FOMC sets inflation target. Janet Yellen Feb. 3, 2014- 18 0.78 dissent because he or she didn’t believe the directive would have the intended effect. 2012 Only one person ever dissented while serving as chair. 2013 Marriner Eccles dissented three times in the late 1930s. 8 2014 2 2015 To read more about FOMC dissents, see the 2014: Q3 issue of the Review at 8 2016 http://research.stlouisfed.org/publications/review. RES17-90308