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Fed’s current rate changers don’t have much experience changing rates

Janet Yellen testifies on Capitol Hill in WashingtonJanet Yellen testifies on Capitol Hill in Washington

All eyes are on the Federal Reserve this week, with economists split over whether or not it will choose to raise short-term interest rates.

But while we wait for the two-day meeting to kick off on Wednesday, there is one thing we do know for sure: Almost no one making the final decision has ever before voted to raise such rates. Actually, they haven’t voted to lower such rates either.

The Fed’s Board of Governors currently has five members. It should be seven, but the Senate hasn’t seen fit to hold votes (or even hearings) on President Obama’s pair of 2015 nominees (including Allan Landon, who has been in limbo since January).

Three of the ruling quintet — including chair Janet Yellen — have only been in place since 2014. Another (Jerome Powell) took office in 2012 and the longest-serving member (Daniel Tarullo) joined in early 2009. But the Fed hasn’t raised federal funds rates since 2006, nor has it cut them since late 2008. It did make a discount rate move in February 2010, but a majority of the current governors were elsewhere.

Also getting a vote will be five other regional Fed presidents, but only one of them — Richmond Fed President Jeffrey Lacker — has ever voted to raise rates (and that was just once, nearly a decade ago). Charles Evans, president of the Chicago Fed, voted a few times to cut rates in the midst of the financial crisis. It also is worth noting that Yellen did once vote to raise rates while leading the San Francisco Fed, but that was all the way back in January 2006.

So if this group does make a move this week, it will be going against more than just economists who don’t believe that the U.S. economy is strong enough to absorb higher rates. It also will be going against their own inertia.

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