[New post] Words which travel the world: global spillovers of the Fed information effect

BankUnderground posted: " Marco Pinchetti and Andrzej Szczepaniak It is certainly not a mystery that the Fed's monetary policy is of great importance for financial markets and the global economy. However, in a recently published Staff Working Paper, we show that the Fed's " New post on Bank Underground Words which travel the world: global spillovers of the Fed information effect by BankUnderground Marco Pinchetti and Andrzej Szczepaniak It is certainly not a mystery that the Fed's monetary policy is of great importance for financial markets and the global economy. However, in a recently published Staff Working Paper, we show that the Fed's monetary policy measures are not the only valuable piece of information contained in the Fed's announcements. Changes in the Fed's economic assessment drive investors' risk behaviour and international capital allocation decisions. Through this channel, changes in Fed views can affect financial conditions and economic activity in the rest of the world, independent of policy actions.  Read more of this post BankUnderground | February 1, 2022 at 9:00 am | Tags: Central Bank communication, communication, Easing, Fed information effect, International spillovers, Monetary policy announcements, Tightening | Categories: Monetary Policy | URL: https://wp.me/p64vV8-2rV Comment    See all comments Unsubscribe to no longer receive posts from Bank Underground. Change your email settings at Manage Subscriptions. Trouble clicking? Copy and paste this URL into your browser: https://bankunderground.co.uk/2022/02/01/words-which-travel-the-world-global-spillovers-of-the-fed-information-effect/