More Dissents at the Bernanke Fed

With today's double-dissent, over 50 percent of the F.O.M.C. meetings that Bernanke has chaired in his two years as the head of the F.O.M.C. have featured a nay-sayer.

In comparison, the second half of Greenspan's tenure only had 15 dissents across 69 meetings -- Bernanke's got 9 so far over 17 meetings.

But the higher level of dissent during the Bernanke Fed doesn't necessarily mean there's more disagreement than there was in the past.

Obtaining data on private internal discussions at Fed meetings during the first half of the Greenspan Fed -- which had a little over 50 dissents between 1987 and 1997 -- Ellen Meade of American University found that the level of voiced objections, as opposed to publicly announced objections, was much higher -- 30 percent versus 7.5 percent.

Bernanke has been more open than his predecessor in encouraging other F.O.M.C. members to express their monetary policy views in public, so if the level of private dissent is the same under the two men, what we might be seeing is the effects of Bernanke's looser hand.

It also seems that dissenters typically err on the side of stricter policy: all but one of the Bernanke nay-sayers has been hawkish. Whether intended or not, these "no" votes have likely helped the Fed maintain some of its inflation fighting credibility. As the fed funds rate heads back toward historical lows, it could be reassuring to some to see the public opposition.

And hawkishness is a common character trait of dissenters. In a separate study, Meade found that two-thirds of nay-sayers between 1978 and 2004 also objected to looser policy.

Voting against lowering rates may also be typical during easing cycles. After nearly two years of no dissents, the Greenspan Fed registered three hawkish "no" votes in 2001 as the fed funds rate was lowered from 6 percent to 1.75 percent.

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