PT  - JOURNAL ARTICLE
AU  - Michael B. McDonald
AU  - Michael Puleo
AU  - Hedieh Shadmani
TI  - Does the Fed Impact Stock Prices?
AID  - 10.3905/joi.2019.28.1.055
DP  - 2019 Jan 31
TA  - The Journal of Investing
PG  - 55--63
VI  - 28
IP  - 1
4099  - https://pm-research.com/content/28/1/55.short
4100  - https://pm-research.com/content/28/1/55.full
AB  - The influence of the Fed’s actions on equity prices has been a source of significant speculation in recent years. This article uses a well-regarded measure for the “fair” value of interest rates to measure the degree to which the Fed is influencing interest rate and then relates that level of interference to equity returns. We find that Fed’s actions are correlated with a modest negative impact on US equity prices—that is Fed interference has a slight negative relationship with broader equity returns. In contrast, outside the US, Central Bank interference generally has a stronger positive relationship to equity returns.TOPICS: Legal and regulatory issues for structured finance, information providers/credit ratings