Furor over the Fed: Presidential Tweets and Central Bank Independence

Antoine Camous and Dmitry Matveev

No 2019-33, Staff Analytical Notes from Bank of Canada

Abstract: We illustrate how market data can be informative about the interactions between monetary and fiscal policy. Federal funds futures are private contracts that reflect investor’s expectations about monetary policy decisions. By relating price movements of these contracts with President Trump’s tweets on monetary policy, we explore how markets have perceived presidential attempts to influence monetary policy decisions. Overall, our results indicate markets expected the Federal Reserve to adjust monetary policy in the direction suggested by President Trump.

Keywords: Central bank research; Credibility; Financial markets; Monetary Policy (search for similar items in EconPapers)
JEL-codes: E44 E52 E58 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2019-12
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:bca:bocsan:19-33

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