Twitter and the Federal Reserve
Brookings Center on Regulation & Markets Working Paper
25 Pages Posted: 18 Feb 2021
Date Written: October 29, 2020
In the last generation, the Federal Reserve launched a “quiet revolution” in how it approaches communication. Most of the tools that the Fed uses to communicate, however, have remained relatively static and indifferent to rapid technological change: speeches, congressional testimony, press conferences and select interviews, and the like. This white paper undertakes the first systematic analysis of the Fed’s participation on Twitter, a medium of increasing importance to public policy discussions. We also analyze how President Donald Trump, one of the most prolific users of the medium, has influenced conversations about the Fed on Twitter.
Using several large datasets—including a dataset containing one percent of all tweets published worldwide—we reach several novel conclusions. Most prominently, we find that the Fed’s Board of Governors is more engaged on Twitter than other independent agencies, but less than executive departments; that other Twitter users engage the Fed more negatively than they do other central banks and federal agencies; that President Trump amplified the conversation on Twitter regarding the Fed; and that the President’s tweets criticizing the Fed elicited a larger, more favorable response than his other tweets. We conclude with suggestions on improving the Fed’s presence on Twitter, particularly at the Federal Reserve Regional Banks, and discuss the ways that political conversations on Twitter may influence Fed communication strategies.
Keywords: social media, Federal Reserve, central banks, Twitter, government communications
JEL Classification: E58
Suggested Citation: Suggested Citation