February 23, 2024

Jerome Powell

Author finds nonverbal cues matter in Fed press conferences

The researchers found that the communication of the Fed’s interest rate decision can drive expectations about house price movements, but a clear explanation of the transmission channel is “critical.”

Carola Binder, Pei Kuang, and Li Tang conducted a randomized controlled trial using an online survey of US consumers. Respondents were randomly assigned to three groups and asked to give forecasts for house price changes and a number of other key variables.Then they were subjected to “information processing”, so