The FOMC's balance-of-risks statement and market expectations of policy actions
Robert Rasche () and
Daniel Thornton ()
Review, 2002, issue Sep, No v. 84, no. 5, 37-50
In January 2000, the Federal Open Market Committee (FOMC) instituted the practice of issuing a “balance of risks” statement along with their policy decision immediately following each FOMC meeting. Robert H. Rasche and Daniel L. Thornton evaluate the use of the balance-of-risks statement and the market’s interpretation of it. They find that the balance-of-risks statement is one of the factors that market participants use to determine the likelihood that the FOMC will adjust its target for the federal funds rate at their next meeting. Moreover, they find that, on some occasions, the FOMC behaved in such a way as to encourage the use of the balance-of-risks statement for this purpose. The clarifying statements that sometimes accompany these balance-of-risks statements, as well as general remarks made by the Chairman and other FOMC members, often provide additional useful information.
Keywords: Federal Open Market Committee; Federal funds rate; Monetary policy (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed
Downloads: (external link)
https://files.stlouisfed.org/files/htdocs/publicat ... 2/09/37-50Rasche.pdf (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:fip:fedlrv:y:2002:i:sep:p:37-50:n:v.84no.5
Ordering information: This journal article can be ordered from
https://files.stloui ... htdocs/publications/
Access Statistics for this article
More articles in Review from Federal Reserve Bank of St. Louis Contact information at EDIRC.
Bibliographic data for series maintained by Anna Oates ().