One Fed, Many Voices: Coordinated Communication vs. Transparent Debate

Milena Djourelova, Filippo Ferroni, Leonardo Melosi and Alessandro Villa

No 20636, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We analyze 481 speeches by FOMC members since 2007, excluding official press conferences. Combining high-frequency financial data with text analysis, we identify monetary policy surprises and measure each speech’s similarity to the preceding Chair’s press conference. On average, monetary surprises around these speeches have no significant effect on inflation expectations or stock prices. Yet, speeches closely aligned with the Chair amplify policy transmission, while less coordinated remarks dilute earlier effects on yields, inflation expectations, and equities. A general equilibrium model with incomplete information rationalizes these findings.

Date: 2025-09
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