Central Bank Communication, Transparency and Interest Rate Volatility: Evidence from the USA

Iris Biefang-Frisancho Mariscal and Peter Howells

Chapter 6 in Macroeconomics, Finance and Money, 2010, pp 91-108 from Palgrave Macmillan

Abstract: Abstract The evidence of monetary policy transparency drawn from money market data is based largely on the behaviour of market rates (of various maturities) on the day of an interest rate decision. A significant reaction is termed a ‘surprise’ and is evidence of a lack of transparency. Generally speaking, the evidence suggests that most central bank interest rate decisions are well anticipated (for the US, for instance, Poole and Rasche (2000), Lange et al. (2003), and Demiralp and Jorda (2004)). This chapter moves the debate on by seeing what ‘openness’ means, if anything, for the behaviour of market interest rates between decision dates.

Keywords: Interest Rate; Monetary Policy; Central Bank; Federal Reserve; Forward Rate (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-28558-3_6

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DOI: 10.1057/9780230285583_6

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