The Importance of Fed Chair Speeches as a Monetary Policy Tool
AEA Papers and Proceedings
vol. 113,
May 2023
(pp. 394-400)
Abstract
I estimate the effects of Federal Open Market Committee (FOMC) announcements, post-FOMC press conferences, and speeches and Congressional testimony by the Fed chair on stock prices, Treasury yields, and interest rate futures from 1988 to 2019. I show that for all but the very shortest-maturity interest rate futures, Fed chair speeches are more important than FOMC announcements. My results suggest that the previous literature's focus on FOMC announcements has ignored the most important source of variation in US monetary policy.Citation
Swanson, Eric T. 2023. "The Importance of Fed Chair Speeches as a Monetary Policy Tool." AEA Papers and Proceedings, 113: 394-400. DOI: 10.1257/pandp.20231073Additional Materials
JEL Classification
- E43 Interest Rates: Determination, Term Structure, and Effects
- E52 Monetary Policy
- E58 Central Banks and Their Policies