arXiv q-fin· Michela Baretti, Umberto Collodel, Jacopo Zacch\'e·· 1 days agoAI Score51
arXiv Paper: Is Verbal Pressure from the Executive Branch on the Federal Reserve Priced by Markets?
Jawboning the Fed: Do Markets Listen When Administrations Talk?
AI summary
This arXiv paper examines whether financial markets interpret political pressure from the executive branch on the Federal Reserve as signals of future monetary policy. The study uses Reuters news releases from 1988 to 2025, spanning approximately four decades, classifying texts as dovish or hawkish pressure via an open-source large language model ensemble, and estimates daily reactions in interest rate expectations, the US dollar, inflation compensation, and market volatility.
Source:arXiv q-fin · arxiv.org
Academic papers#Papers / Research#Macro / Interest Rates#Federal Reserve#Large Language Model Applications#Volatility#US Stocks