Central bank talk: does it matter and why?

Donald L. Kohn and Brian P. Sack

No 2003-55, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: Statements released by the Federal Open Market Committee (FOMC) and congressional testimony by Chairman Greenspan are found to significantly affect market interest rates, indicating that central bank \"talk\" conveys important information to market participants. These effects arise not only because the statements provide information about the near-term policy inclinations of the FOMC but also because the statements convey information about the outlook for the economy. By contrast, statements raising questions about asset valuations typically have not generated a significant response of those asset prices.

Keywords: Monetary policy; Banks and banking, Central (search for similar items in EconPapers)
Date: 2003
New Economics Papers: this item is included in nep-com, nep-mac and nep-mon
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Citations: View citations in EconPapers (59)

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