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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