MacroScope

Love, dissent and transparency at the Fed

December 16, 2011

All four Federal Reserve policymakers who dissented on U.S. central bank policy this year will lose their votes next year. That could make the New Year full of love, but not necessary free from dissent, Dallas Fed President Richard Fisher joked on Friday.

Fisher, like Minneapolis Fed President Narayana Kocherlakota and Philadelphia Fed President Charles Plosser, lobbied and lost against Fed easing earlier this year; all three dissented twice. Chicago Fed President Charles Evans dissented twice from the other side of the aisle, arguing for further easing at the most recent two meetings against the majority’s decision to stand pat.

None will have votes next year. Not, of course, because they voiced their opposition to the majority, but simply because votes rotate among regional Fed presidents according to a set schedule, and it just so happened that all four regional Fed presidents with votes this year used those votes to dissent.

“We still love each other — in fact we’ll love each other more because we are not going to be voters next year – we’ll have to hug each other and have solidarity,” Fisher told reporters after a speech in Austin on Friday. But Fisher for his part vowed that even without a vote he will “not be quiet,” and said that whether colleagues will cast dissents will depend on what proposals are put on the table.

Fisher also suggested that he may balk at new efforts – now under consideration at the Fed – to boost transparency at the nearly 100-year-old central bank.

“We are so transparent, you can put your hands through us,” he quipped. “Name another business, let alone a government agency, any private business in the world, that puts their balance sheet on the Net every two weeks. Do you realize how much work that takes? Anyway we do that, all of us speak, we are publishing our economic forecasts, which can or cannot be of useful efficacy — they are only forecasts and they are all based on the predicament, the assumption rather, of appropriate monetary policy which we determine at the table. We are laying everything on the table…We are about to turn 100, and nothing that’s 100 years old should be providing a full frontal view. It’s unbecoming.”

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