Does Congress Influence Federal Reserve Policy? Evidence from Shared Allegiance and Election Periods

I estimate various backward-looking and forward-looking Taylor rules augmented with variables that indicate proximity to an election and whether the Fed Chair and the majority of a chamber of Congress share the same political party affiliation to investigate whether Congress has influenced Federal Reserve policy from 1961 to 2020. I find that the Fed is susceptible to pressures from the Senate. In line with previous work, left-leaning politicians exhibit a higher tolerance for inflation. This results in the federal funds rate being lower by about 2.35 points when the Democratic party has a Senate majority. Second, while I find some evidence that the House and the Fed Chair sharing partisan affiliation results in tighter policy, this result is not robust to alternative measures of inflation. Finally, I find persuasive evidence that Congressional pressures on the Fed do not create a political monetary cycle around elections.

本文通过引入表征选举临近程度、美联储主席与国会某一议院多数党是否同属一个政党的变量，对加入上述变量的多种后顾型与前瞻型泰勒规则（Taylor rule）进行估计，以考察1961年至2020年间美国国会是否对美联储政策施加了影响。研究结果表明，美联储易受参议院施加的政策压力。与既往研究结论一致，左翼政客对通胀的容忍度更高：当民主党占据参议院多数席位时，联邦基金利率将下调约2.35个百分点。其次，尽管本文发现部分证据显示，当美联储主席与众议院多数党同属一个政党时，货币政策会趋于紧缩，但这一结论在更换通胀衡量指标后并不具备稳健性。最后，本文得到了具有说服力的实证结果：国会对美联储的施压并未在选举周期周围催生政治性货币周期。