Central banks' voting records, the financial crisis and future monetary policy

- Central banks' voting records predict the future course of monetary policy.
- Voting records sometimes predict policy at more distant horizons.
- Financial crisis worsens the monetary policy predictability.
- Central bank independence is key for predictability.

We examine whether central banks' voting records help predict the future course of monetary policy in the Czech Republic, Hungary, Poland, Sweden and the United Kingdom, controlling for financial market expectations. Unlike previous research, we first examine the period of the global financial crisis, characterized by a high level of uncertainty, and second, examine the predictive power of voting records over longer time horizons, i.e., the next monetary policy meeting and beyond. We find that voting records predict the policy rate set at the next meeting in all central banks that are recognized as independent. In some central banks, voting records are found-before, but not during, the financial crisis-to be informative about monetary policy at even more distant time horizons.