FOMC forecasts and economic policy uncertainty

This paper investigates the influence of economic policy uncertainty on Federal Open Market Committee (FOMC) meeting participants' economic forecasts. We find evidence that during periods when the public had increased uncertainty about economic policy there was little change in the dispersion of views by FOMC meeting participants about the future path of inflation, consistent with increased emphasis on inflation objectives prior to formal inflation targeting. In contrast, there was increased dispersion of FOMC unemployment rate forecasts.