LIVE MARKETS-Grit in the oyster - Goldman on central bank dissenters

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GRIT IN THE OYSTER - GOLDMAN ON CENTRAL BANK DISSENTERS

Dissent by central bank policymakers is on the rise, and Goldman has a note out with some fun facts on dissenting to drop into presentations and notes.

Not every central bank discloses their voting breakdown and so this is based on those developed market institutions that do, or - like the ECB - hint at it, as well as some bigger emerging-market central banks.

- The Bank of England's Monetary Policy Committee is by some measures the most discordant, with one dissent at every BoE meeting since 2022. In contrast, Sweden's Riksbank has only seen two dissents in this time.

- The Fed's FOMC has seen a string of dissents for the first time since late 2005, while the National Bank of Poland also sees quite a lot.

- Dissents are less likely around leadership changes, which Goldman say may reflect an effort on the part of both the new leadership and other committee members to establish a good working relationship from early on.

- Central bankers are more likely to disagree when inflation is deviating target or the labour market gets tight, but more likely to agree on policy when labour markets deteriorate.

- Dissents by the head of the central bank are rare, but have happened 10 times in the Czech Republic, compared to just three times at the Fed (in the 1930s) and twice at the BoE (most recently, former governor Mervyn King in 2007).

- Financial markets react to dissents. A hawkish dissent by a quarter of the committee is associated with a 0.7 bp rise in expected short rates and an 8-bp decrease in daily equity returns. "While these effects are small and likely affected by the degree of surprise of the dissent, they affirm that market expectations are informed by the degree of consensus of the committee."

(Alun John)

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