December 22, 2025, Filed Under: Working PaperHow Monetary Policy Is Made: Lessons from Historical FOMC Discussions EMPCT Working Paper Series No. 2025-1054 pages | PDF Download | PDF in Browser Citation:Howes, Cooper, Marc Dordal i Carreras, Olivier Coibion, and Yuriy Gorodnichenko, “How Monetary Policy Is Made: Lessons from Historical FOMC Discussions,” December 2025 Cooper HowesBoard of Governors of Federal Reserve Marc Dordal i CarrerasHong Kong Universityof Science and Technology Olivier CoibionUT Austin, CEPR and NBER Yuriy GorodnichenkoUC Berkeley, CEPR and NBER AbstractWe construct a new dataset of FOMC meeting transcripts from 1966 to 1990 to analyze the sources of heterogeneity in individual monetary policy preferences and study how this heterogeneity shapes policy decisions. Using these detailed discussions, we manually quantify and characterize each FOMC participants’ preferred policies along with their reasoning and justification. We show that participants’ beliefs about the effects of monetary policy—specifically, their perceived slope of the Phillips Curve—play a central role. Participants who believe monetary policy has stronger effects on real activity are more likely to cite output as a justification for easing, while those perceiving stronger price effects emphasize inflation as a reason for tightening. We then show that the Chair plays a unique and powerful role in reconciling these views, not just in setting policy rates, but also in minimizing dissent. The latter occurs because dissenters find their ability to influence policy in subsequent meetings is significantly curtailed.
