Voting right rotation, speeches, and financial market reactions: Evidence from the U.S. federal open market committee

Federal Reserve Bank presidents experience years with and without the right to vote on the U.S. monetary policy committee because of a mechanical voting right rotation scheme. In years presidents vote, their speeches move financial markets less than in years they do not vote. We argue that this vote discount mirrors the way voting status affects presidents’ speech behavior. As speeches given by a president in years with the right to vote are more affected by regional conditions that national markets care less about, markets such as the U.S. Treasury market react less to those speeches.