Federal Reserve Bank of San Francisco Researcher Updates Knowledge of Economics (Perceptions About Monetary Policy): Economics

2024 AUG 13 (NewsRx) -- By a News Reporter-Staff News Editor at Economics Daily Report -- Investigators publish new report on agriculture. According to news originating from the Federal Reserve Bank of San Francisco by NewsRx correspondents, research stated, “We estimate perceptions about the Federal Reserve’s monetary policy rule from panel data on professional forecasts of interest rates and macroeconomic conditions.”

Our news journalists obtained a quote from the research from Federal Reserve Bank of San Francisco: “The perceived dependence of the federal funds rate on economic conditions varies substantially over time, in particular over the monetary policy cycle. Forecasters update their perceptions about the Fed’s policy rule in response to monetary policy actions, measured by high-frequency interest rate surprises, suggesting that they have imperfect information about the rule.”

According to the news reporters, the research concluded: “Monetary policy perceptions matter for monetary transmission, as they affect the sensitivity of interest rates to macroeconomic news, term premia in long-term bonds, and the response of the stock market to monetary policy surprises. A simple learning model with forecaster heterogeneity and incomplete information about the policy rule motivates and explains our empirical findings.”

For more information on this research see: Perceptions About Monetary Policy. The Quarterly Journal of Economics, 2024. The publisher for The Quarterly Journal of Economics is Oxford University Press (OUP).

A free version of this journal article is available at https://doi.org/10.1093/qje/qjae021.

Our news editors report that additional information may be obtained by contacting Michael D Bauer, Federal Reserve Bank of San Francisco, United States and Centre for Economic Policy and Research, United Kingdom. Additional authors for this research include Carolin E Pflueger, Adi Sunderam.

(Our reports deliver fact-based news of research and discoveries from around the world.)