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

Author

Listed:
  • Djourelova, Milena
  • Ferroni, Filippo
  • Melosi, Leonardo
  • Villa, Alessandro

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.

Suggested Citation

  • Djourelova, Milena & Ferroni, Filippo & Melosi, Leonardo & Villa, Alessandro, 2025. "One Fed, Many Voices: Coordinated Communication vs. Transparent Debate," CEPR Discussion Papers 20636, Centre for Economic Policy Research.
    • Handle: RePEc:cpr:ceprdp:20636
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    JEL classification:

    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • 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
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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