Towards a theory of FOMC inaction

As most people know Ben Bernanke was a major critic of the timidity of the Bank of Japan. That's why its been strange to see the FOMC unwilling to take further accommodating action despite this economic forecast:

The Committee expects economic growth to remain moderate over coming quarters and then to pick up very gradually. Consequently, the Committee anticipates that the unemployment rate will decline only slowly toward levels that it judges to be consistent with its dual mandate. Furthermore, strains in global financial markets continue to pose significant downside risks to the economic outlook. The Committee anticipates that inflation over the medium term will run at or below the rate that it judges most consistent with its dual mandate.

I think the reason for this is the quasi-unanimous nature of Fed policy making. For a number of reasons (some probably legitimate) the FOMC seems to feel like it needs to act under appearance of near unanimity.

Every single FOMC statement so far in 2012 has had a single dissenter in Richmond Fed Chair Jeffrey Lacker, who usually didn't support the commitment to near-zero rates through 2014.

In 2011, all FOMC statements were unanimous, except for 3 where Chicago Fed Chair Charles Evans called for additional accommodation, and 2 meetings where 3 of the regional heads (Fisher, Plosser, and Kocherlakota) dissented.

In 2010, Hoenig was the sole dissenter on every statement calling for tighter policy.

In 2009, the decisions were unanimous except for a single dissent by Lacker.

In 2008, you see similar patterns including an absurd call by Fisher to raise rates on August 5.

In the last few years we see zero dissents from members of the board of governors, very few dissents generally, and almost all of them in the direction of tighter policy.

The FOMC's website describes their decision making procedure as: "the Committee must reach a consensus regarding the appropriate course for policy" (Note: the actual rules of procedure don't seem to require this)

I will try to dig through some of the minutes of old meetings to investigate this further, but generally my thesis is that; 1) the FOMC has adopted an informal rule that decisions will only be made through quasi-consensus; 2) none of the members of the board of governors is willing to dissent; and 3) by stressing consensus the FOMC is unable and unwilling to take bolder action which would necessitate revealing broader disagreement within the FOMC.