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Federal Reserve Communications and Newswire Coverage

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  • Matthias Neuenkirch

Abstract

In this paper, we explore the determinants of newswire coverage of Federal Reserve (Fed) communications. Our sample covers all 344 forward‐looking communications made in the period May 1999–May 2004. We find, first, that there is a higher likelihood of newswire coverage for monetary policy reports and speeches by Chairman Greenspan than for testimony and speeches by other Fed members. Furthermore, communications with an explicit monetary policy inclination or tone different from the current interest rate path are particularly likely to be covered. However, the release of important macroeconomic news reduces the likelihood of newswire coverage. Second, speeches by regional Fed presidents are relatively less likely to be reported than speeches by Board members. Nevertheless, newswire coverage of Fed president speeches is more likely if central bank communication is stale. Finally, our results indicate that Ben Bernanke played a distinguished role even before his chairmanship.

Suggested Citation

  • Matthias Neuenkirch, 2014. "Federal Reserve Communications and Newswire Coverage," Working Papers CEB 14-003, ULB -- Universite Libre de Bruxelles.
  • Handle: RePEc:sol:wpaper:2013/155498
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    References listed on IDEAS

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    1. Noll, Roger G., 0. "Urban Concentration: Prospects And Implications," Increasing Understanding of Public Problems and Policies, Farm Foundation.
    2. Ehrmann, Michael & Sondermann, David, 2009. "The reception of public signals in financial markets - what if central bank communication becomes stale?," Working Paper Series 1077, European Central Bank.
    3. Atif Mian & Amir Sufi & Francesco Trebbi, 2010. "The Political Economy of the US Mortgage Default Crisis," American Economic Review, American Economic Association, vol. 100(5), pages 1967-1998, December.
    4. Hayo, Bernd & Neuenkirch, Matthias, 2010. "Do Federal Reserve communications help predict federal funds target rate decisions?," Journal of Macroeconomics, Elsevier, vol. 32(4), pages 1014-1024, December.
    5. Bernd Hayo & Ali M. Kutan & Matthias Neuenkirch, 2008. "Financial Market Reaction to Federal Reserve Communications: Does the Crisis Make a Difference?," MAGKS Papers on Economics 200808, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    6. Hayo, Bernd & Neuenkirch, Matthias, 2012. "Bank of Canada communication, media coverage, and financial market reactions," Economics Letters, Elsevier, vol. 115(3), pages 369-372.
    7. Michael Ehrmann & Marcel Fratzscher, 2007. "Communication by Central Bank Committee Members: Different Strategies, Same Effectiveness?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 39(2-3), pages 509-541, March.
    8. repec:pri:cepsud:161blinder is not listed on IDEAS
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    Cited by:

    1. Hamza Bennani, 2016. "Media Coverage and ECB Policy-Making: Evidence from a New Index," EconomiX Working Papers 2016-38, University of Paris Nanterre, EconomiX.
    2. Bernd Hayo & Ali Kutan & Matthias Neuenkirch, 2015. "Financial market reaction to Federal Reserve communications: Does the global financial crisis make a difference?," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 42(1), pages 185-203, February.
    3. Hayo, Bernd & Neuenkirch, Matthias, 2015. "Self-monitoring or reliance on media reporting: How do financial market participants process central bank news?," Journal of Banking & Finance, Elsevier, vol. 59(C), pages 27-37.
    4. repec:hrv:faseco:33078973 is not listed on IDEAS

    More about this item

    Keywords

    Central Bank Communication; Federal Open Market Committee; Federal Reserve; Monetary Policy; Newswire Coverage;

    JEL classification:

    • 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

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