Federal Reserve Bank of Boston
The final countdown: the effect of monetary policy during "Wait-for-It" and reversal periods
After a long period of loose monetary policy triggered by the Great Recession, some central banks are signaling that they will raise their policy rates soon. Previous research, for example, Bernanke and Kuttner (2005) and Ozdagli (2014), has shown that asset prices react more strongly to monetary policy target surprises on the dates of such a policy reversal announcement. However, we know very little about the channels that generate these effects and whether the cross-sectional differences among firms and sectors play a significant role in transmitting a reversal decision to the economy, a question of primary interest for investors and policymakers.
Cite this item
Ali K. Ozdagli, The final countdown: the effect of monetary policy during "Wait-for-It" and reversal periods, Federal Reserve Bank of Boston, Working Papers 15-15, 01 Sep 2015.
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
Keywords: monetary policy; stock prices; liftoff; gradualism; forward guidance
This item with handle RePEc:fip:fedbwp:15-15
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