Inflation experiences shape central bankers' hawkish or dovish leanings.
Personal experiences of inflation strongly influence central bankers' hawkish or dovish leanings. By analyzing lifetime inflation data of Federal Open Market Committee (FOMC) members since 1951, an adaptive learning rule was estimated. This rule helps predict FOMC voting decisions, the tone of speeches, and inflation projections. Inflation experiences also impact the federal funds target rate, beyond traditional factors like the Taylor rule.