New study reveals how monetary policy changes impact asset prices!
The article explores how asset prices react to new information about the money stock, depending on changes in monetary policy, Federal Reserve procedures, and reserve accounting rules. The study includes evidence from different targeting procedures and accounting rules, showing that the response of asset prices varies. It distinguishes between periods when asset prices change due to real interest rate shifts and those due to inflation premium changes. The new contemporaneous reserve accounting rules have significantly reduced the information content of money stock announcements.