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The Fed Chairman Always Votes With The Majority

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by Felix Salmon
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Jun 25 2007 12:00am EDT

The Fed Chairman Always Votes With the Majority

The Economist has a great post up today on a key difference between the UK and US central banks: in the UK, it's perfectly fine for the governor of the Bank of England to be in the minority when a vote is taken on interest rates. In the US, if the chairman of the Federal Reserve ever found himself voting in the minority, it's expected that he would resign.

"Losing occasionally doesn’t do the governor’s credibility any harm," notes the blog. "In fact, it may do the opposite." So why the need for the Fed chairman always to be in the majority? I can't think of a single good reason, and in fact I'm having difficulty even coming up with bad reasons. Can someone explain the US system to me?

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