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Fed communication on financial stability concerns and monetary policy decisions: revelations from speeches

Klodiana Istrefi, Florens Odendahl (florens.odendahl@bde.es) and Giulia Sestieri
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Florens Odendahl: Banco de España

No 2110, Working Papers from Banco de España

Abstract: This paper studies the informational content of speeches of Fed officials, focusing on financial stability, from 1997 to 2018. We construct indicators that measure the intensity and tone of this topic for both Governors and Fed presidents. When added to a standard forward-looking Taylor rule, a higher topic intensity or negative tone is associated with more monetary policy accommodation than implied by the state of the economy. Our results are mainly driven by the information in speeches of Fed presidents. We discuss several channels to rationalize this finding.

Keywords: monetary policy; Federal Reserve; financial stability; communication (search for similar items in EconPapers)
JEL-codes: E03 E50 E61 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2021-03
New Economics Papers: this item is included in nep-mac and nep-mon
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Citations: View citations in EconPapers (1)

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https://www.bde.es/f/webbde/SES/Secciones/Publicac ... 21/Files/dt2110e.pdf First version, March 2021 (application/pdf)

Related works:
Journal Article: Fed communication on financial stability concerns and monetary policy decisions: Revelations from speeches (2023) Downloads
Working Paper: Fed Communication on Financial Stability Concerns and Monetary Policy Decisions: Revelations from Speeches (2022) Downloads
Working Paper: Fed Communication on Financial Stability Concerns and Monetary Policy Decisions: Revelations from Speeches (2020) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:bde:wpaper:2110

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