Hayo, Bernd; Neuenkirch, Matthias - Volkswirtschaft Abteilung, Fachbereich … - 2009
We explain federal funds target rate decisions using macroeconomic variables and Federal Reserve communication … indicators. Econometrically, we employ an ordered probit model of a Taylor rule to predict 75 target rate decisions between 1998 … and 2006. We find, first, that our communication indicators significantly explain target rate decisions and improve …