The Changing Probability of a Monetary Policy Response to Inflation and Employment Announcements

Adrienne Kearney ()
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Adrienne Kearney: : Department of Economics, University of Maine

Eastern Economic Journal, 2003, vol. 29, issue 4, 565-574

Abstract: This paper investigates the changing probability of a monetary policy response to inflation and employment announcements within the Federal Funds targeting procedure. It is found that employment announcements are significantly linked to Federal Reserve policy actions and the probability of no change in the funds target more than doubles in going from the March 1984-March 1991 period to the April 1994-January 2002 period. This change in policy behavior is also mirrored by the behavior of financial market participants; employment surprises help explain movements in the T-bill rate in the earlier period but not in the later period.

Keywords: Employment; Fund; Inflation; Monetary Policy; Monetary; Policy (search for similar items in EconPapers)
JEL-codes: E24 E31 E43 E52 (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eej:eeconj:v:29:y:2003:i:4:p:565-574

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