I show that political alignment between Federal Open Market Committee (FOMC) members and the incumbent U.S. President systematically influences monetary policy. I construct two novel, individual-level measures of political alignment for each member of the FOMC, based on their political campaign contributions and political appointments to public roles. Using a stacked Difference-in-Differences design around presidential party transitions from 1990, I find that a individual-level positive shift in political alignment with the sitting U.S. President leads FOMC members toward more expansionary policy preferences and more optimistic macroeconomic forecasts (over-forecasting GDP and under-forecasting inflation). The results also hold when examining historical FOMC votes starting from 1936. At the committee level, a one-point increase in political alignment of the FOMC lowers the federal funds rate by approximately 25 basis points relative to the Federal Reserve staff’s benchmark recommendation. These politically-driven rate decisions generate a partisan business cycle: periods of political alignment between the Fed and the executive lead to more frequent interest rate cuts, stimulating short-term gains in real gdp, employment, and stock market, but contributing to higher inflation in the long run. Conversely, during periods of political misalignment the FOMC raises interest rates above the apolitical benchmark, resulting in short-run output contractions, but controlling long-run inflation.