IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/20636.html

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

Author

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

Abstract

We study how observed coordination in central bank communication affects monetary policy transmission. We assess the alignment of 481 speeches by FOMC members since 2007 with post-meeting communication using a text-similarity measure (cosine similarity). To identify policy shocks, we use high-frequency changes in eurodollar futures around each speech. On average, these monetary policy speech surprises have no significant effects on inflation expectations or equity prices. However, speech surprises more closely aligned with prior FOMC communications strengthen monetary policy transmission, while those reflecting visible disagreement significantly weaken it. 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
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP20636
    Download Restriction: no
    ---><---

    Other versions of this item:

    More about this item

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:20636. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CEPR (email available below). General contact details of provider: https://cepr.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.