Home bias: Do Regional Feds overweight headquarters housing prices?

   Sep 15th, 2025
 
11:00 AM to 12:30 PM
 Reserve Bank of India, Kalpavriksh Auditorium, Ground Floor, Mumbai Regional Office, Fort, Mumbai

Abstract

Do signals from ‘closer to home’ have outsized salience in the formation of expert judgments? We investigate this hypothesis by examining the sentiment about residential housing expressed by presidents of US Federal Reserve Banks in the meetings of the Federal Open Market Committee. While sentiment about the regional residential housing market is strongly correlated with the conditions in the Federal Reserve District, we find that it is dominated by the housing price growth in their headquarters. We uncover evidence suggesting that the strength of social ties could drive this ‘home bias’.

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