The Impacts of Monetary Policy Statements

Bruno Feunou, Corey Garriott, James Kyeong and Raisa Leiderman

Staff Analytical Notes from Bank of Canada

Abstract: In this note, we find that market participants react to an unexpected change in the tone of Canadian monetary policy statements. When the market perceives that the Bank of Canada plans to tighten (or alternatively, loosen) the monetary policy earlier than previously expected, the Canadian dollar appreciates (or depreciates) and long-term Government of Canada bond yields increase (or decrease). The tone of a statement is particularly relevant to the market when the policy rate has been unchanged for some time.

Keywords: Asset Pricing; Exchange rates; Interest rates; Transmission of monetary policy (search for similar items in EconPapers)
JEL-codes: E43 E52 F31 G12 (search for similar items in EconPapers)
Pages: 10 pages
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:bca:bocsan:17-22

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