Herding Among FOMC Members

Interesting new paper studying herding behaviors among FOMC members with respect to the forecasts they submit for economic growth, unemployment, inflation, etc. Do they tend to herd around one another? No, they anti-herd in inflation — scatters forecasts intentionally.

Do FOMC Members Herd?

Jan-Christoph Ru ?lke†and Peter Tillmann‡

October 22, 2010


Twice a year FOMC members submit forecasts for growth, unemplyoment and inflation to be published in the Humphrey- Hawkins Report to Congress. In this paper we use individual FOMC forecasts to assess whether these forecasts exhibit herding behavior, a pattern often found in private sector forecasts. While growth and unemployment forecast do not show herding behavior, the inflation forecasts show strong evidence of anti-herding, i.e. FOMC members intentionally scatter their forecasts around the consensus. Interestingly, anti-herding is more important for non-voting members than for voters.