Do the Voting Rights of Federal Reserve Bank Presidents Matter?

Voting seats at FOMC meetings rotate exogenously among Reserve Bank presidents on a yearly basis. Using detailed data on 472 FOMC meetings that took place between 1969 and 2019, we show that when there is a substantial dispersion in inflation across districts, inflation in Reserve Bank presidents' districts affects Federal funds target rates only when those presidents hold voting seats at FOMC meetings. The economic conditions in voting districts are a source of monetary policy shocks, affect Taylor rule regressions, and have a profound effect on financial markets. The path of the target rate would have been different if the economic conditions in all districts affected FOMC decisions.