Working Paper

Risk aversion and weekly money: does the market expect the Fed to offset large increases in M1?


Abstract: The risk premium hypothesis suggests that absolute changes in short-term interest rates will be larger if the unanticipated component of the Federal Reserve's weekly money supply announcement is positive. Statistical tests suggest, however, that the magnitude of interest rate changes are unrelated to the sign of monetary surprises.

https://doi.org/10.20955/wp.1984.009

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Provider: Federal Reserve Bank of St. Louis

Part of Series: Working Papers

Publication Date: 1984

Number: 1984-009