Do Federal Reserve communications help predict federal funds target rate decisions?

Hayo, Bernd; Neuenkirch, Matthias

doi:10.1016/j.jmacro.2010.06.003

Cited by 80 publications

(29 citation statements)

References 26 publications

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“…Interestingly, Neuenkirch andSiklos (2013, 2014) examine the voting records of so-called shadow committees of professional and academic economists, which provide alternatives to the official voting records of central banks. Hayo and Neuenkirch (2010) …”

Section: Literature Survey Of Central Bank Votingmentioning

confidence: 99%

Central banks' voting records, the financial crisis and future monetary policy

Horváth

Jonášová

2015

European Journal of Political Economy

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We examine whether central banks' voting records help predict the future course of monetary policy in the Czech Republic, Hungary, Poland, Sweden and the United Kingdom, controlling for financial market expectations. Unlike previous research, first, we examine the period of the global financial crisis, characterized by a high level of uncertainty, and second, we examine the predictive power of voting records at longer time horizons, i.e., not only for the next monetary policy meeting. We find that voting records predict the policy rate set at the next meeting in all central banks that are recognized as independent. In some central banks, voting records are found-before, but not during, the financial crisis-to be informative about monetary policy even at more distant time horizons. Terms of use: Documents in

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Section: Literature Survey Of Central Bank Votingmentioning

confidence: 99%

Central banks' voting records, the financial crisis and future monetary policy

Horváth

Jonášová

2015

European Journal of Political Economy

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“…12 Policy changes in the FOMC are usually made in multiples of 25 basis points, that is, in discrete steps. Instead of applying some form of discrete modelling technique (see Lapp, Pearce and Laksanasut, 2003;Hayo and Neuenkirch, 2010), we round the level of the (simulated) interest rate preferences to the next feasible federal funds target rate step in all simulations presented in this paper (that is, multiple steps of 25 basis points). The rationale for it is provided by the fact that rounding is implicit in the way interest rate preferences are expressed 28…”

Section: A Counterfactual Disagreement Distribution Form the Baselinementioning

confidence: 99%

Does the Greenspan era provide evidence on leadership in the FOMC?

El‐Shagi

Jung

2015

Journal of Macroeconomics

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“…Communication strategies of the FOMC are studied in, e.g., Middeldorp (2011) and Carlson et al (2006). It has been shown, for instance, by Hayo and Neuenkirch (2010) for the FOMC or Sturm and de Haan (2011) for the ECB that communication can help predict the future interest rate decision.…”

Section: Introductionmentioning

confidence: 99%

Are Survey Expectations Theory-Consistent? The Role of Central Bank Communication and News

Dräger

Lamla

Pfajfar

2015

FEDS

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In this paper we analyze whether central bank communication can facilitate the understanding of key economic concepts. Using survey data for consumers and professionals, we calculate how many of them have expectations consistent with the Fisher Equation, the Taylor rule and the Phillips curve and test, by accounting for three different communication channels, whether central banks can influence those. A substantial share of participants has expectations consistent with the Fisher equation, followed by the Taylor rule and the Phillips curve. We show that having theory-consistent expectations is beneficial, as it improves the forecast accuracy. Furthermore, consistency is time varying. Exploring this time variation, we provide evidence that central bank communication as well as news on monetary policy can facilitate the understanding of those concepts and thereby improve the efficacy of monetary policy.

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Do Federal Reserve communications help predict federal funds target rate decisions?

Abstract: We explain federal funds target rate decisions using macroeconomic variables and Federal JEL:E43, E52, E58

Cited by 80 publications

References 26 publications

Central banks' voting records, the financial crisis and future monetary policy

Central banks' voting records, the financial crisis and future monetary policy

Does the Greenspan era provide evidence on leadership in the FOMC?

Are Survey Expectations Theory-Consistent? The Role of Central Bank Communication and News

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