Investors are eagerly anticipating the Federal Open Market Committee’s decision today regarding the federal funds interest rate. The committee currently has five women, and a recent study suggests that the group’s gender balance impacts their interactions.
The FOMC, a 12-member committee, determines the direction of U.S. monetary policy. Holding eight meetings per year, its primary policy decision is whether to change the federal funds rate—a decision that reverberates through the economy, affecting everything from mortgage and credit card interest rates to the returns from savings accounts and investments. The May announcement is expected today.
Recent research revealed the benefits of having a gender-balanced FOMC. The study, published last month in the peer-reviewed journal Human Relations, examined the transcripts of 330 FOMC meetings and found that increased gender diversity on the committee was linked to a broader and more detailed discussion of issues.