The market reaction to federal reserve policy action from 1989 to 1992

Vincent Reinhart, Timothy Simin

Research output: Contribution to journalArticle

21 Citations (Scopus)

Abstract

An examination of the market reaction to Federal Reserve policy easings from 1989 to 1992 suggests that these actions were mostly unexpected and were not viewed to be persistent. Changes in the intended trading range for the federal funds rate had their greatest impact on the near-term outlook, but those effects diminished as the investing horizon lengthened. By this interpretation, any change in longer-term interest rates was mostly owed to the consequences of lower near-term rates, not to any substantial revision to the longer-run outlook. Most significantly, the range of reaction was remarkably wide across all markets.

Original languageEnglish (US)
Pages (from-to)149-168
Number of pages20
JournalJournal of Economics and Business
Volume49
Issue number2
StatePublished - Dec 1 1997

Fingerprint

Market reaction
Federal Reserve
Federal funds rate
Long-term interest rates
Investing

All Science Journal Classification (ASJC) codes

  • Business, Management and Accounting(all)
  • Economics and Econometrics

Cite this

@article{a7e24a9bef114ad287252183d467f500,
title = "The market reaction to federal reserve policy action from 1989 to 1992",
abstract = "An examination of the market reaction to Federal Reserve policy easings from 1989 to 1992 suggests that these actions were mostly unexpected and were not viewed to be persistent. Changes in the intended trading range for the federal funds rate had their greatest impact on the near-term outlook, but those effects diminished as the investing horizon lengthened. By this interpretation, any change in longer-term interest rates was mostly owed to the consequences of lower near-term rates, not to any substantial revision to the longer-run outlook. Most significantly, the range of reaction was remarkably wide across all markets.",
author = "Vincent Reinhart and Timothy Simin",
year = "1997",
month = "12",
day = "1",
language = "English (US)",
volume = "49",
pages = "149--168",
journal = "Journal of Economics and Business",
issn = "0148-6195",
publisher = "Elsevier Inc.",
number = "2",

}

The market reaction to federal reserve policy action from 1989 to 1992. / Reinhart, Vincent; Simin, Timothy.

In: Journal of Economics and Business, Vol. 49, No. 2, 01.12.1997, p. 149-168.

Research output: Contribution to journalArticle

TY - JOUR

T1 - The market reaction to federal reserve policy action from 1989 to 1992

AU - Reinhart, Vincent

AU - Simin, Timothy

PY - 1997/12/1

Y1 - 1997/12/1

N2 - An examination of the market reaction to Federal Reserve policy easings from 1989 to 1992 suggests that these actions were mostly unexpected and were not viewed to be persistent. Changes in the intended trading range for the federal funds rate had their greatest impact on the near-term outlook, but those effects diminished as the investing horizon lengthened. By this interpretation, any change in longer-term interest rates was mostly owed to the consequences of lower near-term rates, not to any substantial revision to the longer-run outlook. Most significantly, the range of reaction was remarkably wide across all markets.

AB - An examination of the market reaction to Federal Reserve policy easings from 1989 to 1992 suggests that these actions were mostly unexpected and were not viewed to be persistent. Changes in the intended trading range for the federal funds rate had their greatest impact on the near-term outlook, but those effects diminished as the investing horizon lengthened. By this interpretation, any change in longer-term interest rates was mostly owed to the consequences of lower near-term rates, not to any substantial revision to the longer-run outlook. Most significantly, the range of reaction was remarkably wide across all markets.

UR - http://www.scopus.com/inward/record.url?scp=0011762370&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=0011762370&partnerID=8YFLogxK

M3 - Article

AN - SCOPUS:0011762370

VL - 49

SP - 149

EP - 168

JO - Journal of Economics and Business

JF - Journal of Economics and Business

SN - 0148-6195

IS - 2

ER -