FOMC Voting

There was a dissent at today's Fed meeting: While a majority of the FOMC voted to hold interest rates steady, one person dissented, preferring an increase of 25 basis points in the federal funds rate.

The voting procedure of approval/dissent seems a bit odd in this context. So does the convention of rounding the target rate to the nearest 25 basis points.

Here is an idea: Why not put median voter theory into practice? Let's have every FOMC member state a number for his or her preferred target for the federal funds rate and then make the outcome equal to the median.

The median-voter approach would not lead to very different outcomes, but it would provide a way for each member to express his or her view transparently without seeming like a troublemaker. The approach would be particularly helpful when there are more than two possible outcomes. In some future meeting, maybe not so far away, the Fed may have to choose among cutting rates to promote growth, raising rates to fight inflation, and holding steady. A median-voter rule would automatically arbitrate among the competing viewpoints.