The Financial Market Effect of FOMC Minutes

15 Pages Posted: 15 Jan 2014

See all articles by Carlo Rosa

Carlo Rosa

Federal Reserve Banks - Federal Reserve Bank of New York

Date Written: December 1, 2013


The influence of the Federal Reserve’s unanticipated target rate decisions on U.S. asset prices has been the subject of numerous studies. More recently, researchers have looked at the asset price response to statements issued by the Federal Open Market Committee (FOMC). Yet, despite a vast and growing body of evidence on the financial market effect of monetary news released on FOMC meeting days, little is known about the real-time response of U.S. asset prices to the information contained in central bank minutes. This article fills the gap by using a novel, high-frequency data set to examine the effect of the FOMC minutes release on U.S. asset prices — Treasury rates, stock prices, and U.S. dollar exchange rates. The author shows that the release significantly affects the volatility of U.S. asset prices and their trading volume. The magnitude of the effects is economically and statistically significant, and it is similar in magnitude to the Institute for Supply Management manufacturing index release, although smaller than that of the FOMC statement and nonfarm payrolls releases. The asset price response to the minutes, however, has declined in recent years, suggesting that the FOMC has become more transparent by releasing information in a timelier manner.

Keywords: Monetary policy, FOMC minutes, High-frequency asset prices

JEL Classification: E52, C01

Suggested Citation

Rosa, Carlo, The Financial Market Effect of FOMC Minutes (December 1, 2013). Economic Policy Review, Vol. 19, No. 2, 2013, Available at SSRN:

Carlo Rosa (Contact Author)

Federal Reserve Banks - Federal Reserve Bank of New York ( email )

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