bullish

An Event Study of the Fed's Reaction Function

Cam has highlighted this Insight as a Top Pick
290 Views27 Mar 2023 03:36
SUMMARY
  • The latest "dot plot" is stale by the time it's published and there's a high degree of uncertainty around its projections. Instead...
  • What matters more is the Fed’s reaction function to financial crises. We have conducted an event study of how the Fed has reacted to shocks and crises in the past.
  • In all cases, the Fed took action to stabilize the system. Once stability returned, the Fed withdrew stimulus measures 2–3 months after the event.
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Cam Hui
Cross-Asset Strategist & Quantitative Analyst
Pennock Idea Hub
United StatesMulti-AssetCross Asset Strategy
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