Fed Thoughts: The Sociology of Central Bankers

This paper makes the case that understanding the sociology of policymaking committees helps to understand the intent behind and future path of their decisions. First, we spell out these three salient features. Next, we apply this description to the Federal Reserve’s (Fed) upcoming actions on tapering its asset purchases and timing the liftoff of policy rates. Neither will begin soon, certainly not at the upcoming Fed meeting, but officials will begin to put a narrative frame around those future actions. Last, we explain how the inherent constraints imposed by tribal behavior narrow the import of the European Central Bank’s new policy framework.