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

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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 Chair’s press conference preceding it. On average, monetary surprises around these speeches have no significant effect on inflation expectations or stock prices. Yet, speeches closely aligned with the Chair’s press conference 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

  • Milena Djourelova & Filippo Ferroni & Leonardo Melosi & Alessandro Villa, 2025. "One Fed, Many Voices: Coordinated Communication vs. Transparent Debate," Working Paper Series WP 2025-23, Federal Reserve Bank of Chicago.
    • Handle: RePEc:fip:fedhwp:102273
    DOI: 10.21033/wp-2025-23
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    Keywords

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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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