Digital euro
The Eurosystem is preparing for the potential issuance of a digital euro to complement physical cash.
PRESS RELEASE
29 October 2026
President Christine Lagarde to step down
President Lagarde has informed the Governing Council and the President of the European Council António Costa that she will step down from her position on 7 February 2027. Her successor will be appointed by the European Council in due course.
Read the press release
MONETARY POLICY
29 October 2026
Our monetary policy statement at a glance
What are the main points in our new monetary policy statement and what mattered to us in our decision? Our visual statement explains this in short and easy-to-understand language.
More
PODCAST
29 October 2026
Tune in to our latest decisions
Our Governing Council decided on monetary policy, determined to ensure that inflation stabilises at our two percent target in the medium term. Listen to this episode where President Christine Lagarde presents the decisions during our press conference.
Listen to the episode- 29 October 2026
- MONETARY POLICY DECISIONEnglishOTHER LANGUAGES (23) +
- 29 October 2026
- PRESS RELEASE
- 28 October 2026
- EURO AREA ECONOMIC AND FINANCIAL DEVELOPMENTS BY INSTITUTIONAL SECTOR (FULL)
- 27 October 2026
- WEEKLY FINANCIAL STATEMENTEnglishOTHER LANGUAGES (22) +Annexes
- 27 October 2026
- WEEKLY FINANCIAL STATEMENT - COMMENTARY
- 27 October 2026
- MONETARY DEVELOPMENTS IN THE EURO AREAAnnexes
- 27 October 2026
- MONETARY DEVELOPMENTS IN THE EURO AREA
- 29 October 2026
- Keynote address by Piero Cipollone, Member of the Executive Board of the ECB, at an EU T+1 Industry Committee event on “One year to T+1”
- 29 October 2026
- Christine Lagarde, President of the ECB, Boris Vujčić, Vice-President of the ECB, Frankfurt am Main, 29 October 2026EnglishOTHER LANGUAGES (19) +Related
- 29 October 2026
- 26 October 2026
- Keynote speech by Frank Elderson, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, at COP17 Finance and Biodiversity Day
- 21 October 2026
- Presentation by Piero Cipollone, Member of the Executive Board of the ECB, to the Executive Committee of the Italian Banking Association
- 21 October 2026
- Remarks by Philip R. Lane, Member of the Executive Board of the ECB, at the CF40-Euro50 luncheon “Monetary System Beyond the Dollar”
- 24 October 2026
- Interview with Piero Cipollone, Member of the Executive Board of the ECB, conducted by Roberto Sommella on 21 October 2026
- 20 October 2026
- Interview with Frank Elderson, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, conducted by Aloysius Widmann on 14 October 2026
- 8 October 2026
- Interview with Piero Cipollone, Member of the Executive Board of the ECB, conducted by Daniele Manca on 23 September 2026
- 6 October 2026
- Interview with Philip R. Lane, Member of the Executive Board of the ECB, conducted by Domenico Conti on 1 October 2026
- 30 September 2026
- Interview with Christine Lagarde, President of the ECB, conducted by Jean-Claude Bourbon and Marie Dancer on 16 and 28 September 2026
- 21 October 2026
- Despite a sharp rise in energy prices in early 2026, the euro area economy has proved resilient. This blog examines how decreased vulnerability to energy shocks, policy support and the global AI upswing have helped cushion the impact, and explores what is needed to sustain that resilience.Details
- JEL Code
- E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
Q43 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Energy→Energy and the Macroeconomy
E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy
- 20 October 2026
- Has food inflation lost its bite? In this blog we explain why food inflation has fallen sharply, why new pressures are building from energy and extreme weather, and why many households are still feeling the effects of higher food prices.Details
- JEL Code
- E20 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→General
E30 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→General
- 19 October 2026
- From Keynes’s famous “digging holes” example to modern stabilisation policy, Economics has come a long way in understanding how governments can respond to crises. The 2026 Nobel Prize recognises that progress. This blog post explains the research behind it.Details
- JEL Code
- D10 : Microeconomics→Household Behavior and Family Economics→General
E10 : Macroeconomics and Monetary Economics→General Aggregative Models→General
B30 : History of Economic Thought, Methodology, and Heterodox Approaches→History of Economic Thought: Individuals→General
B40 : History of Economic Thought, Methodology, and Heterodox Approaches→Economic Methodology→General
- 8 October 2026
- Climate change and the transition to a carbon-neutral economy do not affect everyone equally. This blog explores how the distributional effects of climate change and the transition can become relevant for price and financial stability.Details
- JEL Code
- E50 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→General
G20 : Financial Economics→Financial Institutions and Services→General
Q54 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Environmental Economics→Climate, Natural Disasters, Global Warming
- 6 October 2026
- AI has the potential to reshape the euro area economy. This ECB Blog post explores how AI investments are being financed, focusing on the current financing mix of the most AI-intensive sectors and the consequences for monetary policy.Details
- JEL Code
- D20 : Microeconomics→Production and Organizations→General
- 27 October 2026
- EURO AREA BANK LENDING SURVEYAnnexes
- 27 October 2026
- EURO AREA BANK LENDING SURVEY - ANNEX
- 26 October 2026
- SURVEY ON THE ACCESS TO FINANCE OF ENTERPRISES IN THE EURO AREAAnnexes
- 26 October 2026
- SAFE QUESTIONNAIRE
- 19 October 2026
- WORKING PAPER SERIES - No. 3302Details
- Abstract
- General-purpose technologies create large opportunities but make their distribution across firms difficult to assess in real time. We use banks as interpreters of the rise of generative AI by studying lender-specific probability-of-default (PD) estimates for private firms in four large euro-area economies. As public attention to AI rises after ChatGPT, banks lower assessed default risk for borrowers in highly AI-exposed industries by about 5%. The reassessment is weaker for labor-intensive firms and stronger among lenders with pre-existing industry expertise. Yet the favorable industry-level effect is accompanied by a systematic reordering within product markets: banks reassess firms with stronger pre-ChatGPT market positions less favorably relative to their competitors, compressing the risk advantage associated with market leadership. Credit allocation moves in the same direction, with market leaders experiencing relatively lower drawn and committed credit, more relationship exits, and fewer new lenders. The reordering also predicts subsequent bad-credit events beyond banks’ consensus PDs. Internal bank assessments therefore provide a forward-looking measure of how generative AI is expected to reshape competitive risk.
- JEL Code
- D82 : Microeconomics→Information, Knowledge, and Uncertainty→Asymmetric and Private Information, Mechanism Design
D83 : Microeconomics→Information, Knowledge, and Uncertainty→Search, Learning, Information and Knowledge, Communication, Belief
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
O33 : Economic Development, Technological Change, and Growth→Technological Change, Research and Development, Intellectual Property Rights→Technological Change: Choices and Consequences, Diffusion Processes
- 19 October 2026
- OCCASIONAL PAPER SERIES - No. 401Details
- Abstract
- This paper quantifies the regulatory cost of short-term money market transactions and analyses how post-global financial crisis prudential reforms shape the structure of euro area money markets and the redistribution of central bank reserves. As the stock of reserves declines with the normalisation of the European Central Bank’s balance sheet, trading in money markets is becoming increasingly important to banks’ liquidity management. As the related money market volumes rise, regulatory constraints may become a more visible determinant of trading activity and short-term rate formation. Focusing on key Basel III requirements – the liquidity coverage ratio, net stable funding ratio and leverage ratio – the paper derives stylised estimates of the marginal regulatory cost associated with unsecured and secured interbank transactions. The results indicate that unsecured interbank lending entails material regulatory costs, estimated at around 35 basis points for lenders and around 15 basis points for borrowers in the second half of 2025, reflecting capital and stable funding requirements. By contrast, secured transactions such as repurchase agreements benefit from substantially lower costs, typically well below 10 basis points when backed by high-quality collateral. These differences create structural incentives favouring secured over unsecured intermediation, suggesting that repo markets are likely to remain the main channel for reserve redistribution as the stock of reserves declines. The findings imply that post-crisis regulation has contributed to a persistent shift in the structure of euro area money markets, with implications for liquidity distribution and monetary policy implementation.
- JEL Code
- E43 : Macroeconomics and Monetary Economics→Money and Interest Rates→Interest Rates: Determination, Term Structure, and Effects
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
- 16 October 2026
- OTHER PUBLICATION
- 15 October 2026
- WORKING PAPER SERIES - No. 3301Details
- Abstract
- We study how frictions impact haircut setting in repo markets. Using transaction-level supervisory data and exploiting the 2021 introduction of the binding leverage ratio requirement, we show that three frictions jointly shape haircuts in the bilateral dealer-to-client segment: dealer balance sheet constraints, collateral convenience yields, and client outside options. In collateral-driven repos, binding leverage constraints and broader client outside options both raise haircuts, while higher convenience yields push them down. In funding-driven trades, the leverage constraint has no effect, higher convenience yields raise haircuts through the rehypothecation channel, and broader client outside options lower them. We rationalise these patterns in a bilateral bargaining model with periodic haircut renegotiation. Consistent with the model, constrained dealers exhibit higher repo-rate volatility and weaker pass-through of ECB policy rate changes in the collateral-driven segment. Post-crisis bank regulation thus carries potential unintended consequences for repo market functioning and the transmission of monetary policy.
- JEL Code
- C78 : Mathematical and Quantitative Methods→Game Theory and Bargaining Theory→Bargaining Theory, Matching Theory
E43 : Macroeconomics and Monetary Economics→Money and Interest Rates→Interest Rates: Determination, Term Structure, and Effects
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
G12 : Financial Economics→General Financial Markets→Asset Pricing, Trading Volume, Bond Interest Rates
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
- 15 October 2026
- WORKING PAPER SERIES - No. 3300Details
- Abstract
- Holding limits are a central design feature of proposed retail central bank digital currencies (CBDC). While such limits mechanically prevent individuals from exceeding a maximum balance, they may also generate behavioral responses whose directions are a priori unclear. We conducted an incentivized online experiment with participants from four euro-area countries, exogenously varying the presence and level of a holding limit to causally separate direct mechanical effects from behavioral effects. We find that behavioral responses increase holdings of the means of payment subject to the holding limit, consistent with an attraction effect. This effect is material only when the limit is high enough. Enabling reverse waterfall —automatic conversion into this limited means of payment— increases adoption while reducing holdings. These results suggest that combining holding limits with automatic funding mechanisms can support CBDC use while containing holdings, thereby helping to mitigate potential financial stability risks.
- JEL Code
- E42 : Macroeconomics and Monetary Economics→Money and Interest Rates→Monetary Systems, Standards, Regimes, Government and the Monetary System, Payment Systems
C91 : Mathematical and Quantitative Methods→Design of Experiments→Laboratory, Individual Behavior
D14 : Microeconomics→Household Behavior and Family Economics→Household Saving; Personal Finance
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
- 15 October 2026
- OTHER PUBLICATION
- 14 October 2026
- WORKING PAPER SERIES - No. 3299Details
- Abstract
- How does heterogeneity in banks’ interest-rate risk exposure shape monetary policy transmission? We develop a quantitative macroeconomic model of heterogeneous banks to answer this question. We establish an irrelevance result: differences in interest-rate risk exposure between fixed- and variable-rate banking systems matter for transmission only when bank solvency concerns become relevant. Calibrating the model to the euro area, we show that idiosyncratic default risk pushes a substantial share of banks toward the solvency threshold, making heterogeneity quantitatively important. When policy rates rise, fixed-rate banks suffer net interest margin compression—funding costs increase while legacy loan income stays unchanged—eroding capital and triggering sharper deleveraging. The lending elasticity to monetary policy is one-third larger in fixed-rate economies. The effects extend to financial stability: tightening raises bank failure rates in fixed-rate systems while lowering them in variable-rate systems. The results provide a rationale for macroprudential and monetary policy coordination and for monetary policy gradualism.
- JEL Code
- E51 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Money Supply, Credit, Money Multipliers
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation - Network
- Challenges for Monetary Policy Transmission in a Changing World Network (ChaMP)
- 14 October 2026
- WORKING PAPER SERIES - No. 3298Details
- Abstract
- We introduce a novel measure of how European Central Bank (ECB) monetary policy is interpreted by analysts at major investment banks. We construct a “policy interpretation shock” based on the language used in analysts’ reports covering monetary policy decisions by the ECB’s Governing Council (GovC). The main identifying assumption is that changes in the way analysts report on policy communication by the GovC—that is, the change in the policy tone from the preview report to the recap report—reflect unexpected information revealed by the policy event. Using GPT-based sentiment extraction, we show that the tone in these reports closely tracks that of the GovC, often even anticipating shifts in tone. Changes in the policy tone before and after meetings capture how market intermediaries interpret and adjust their assessment of policy decisions. These interpretation shocks are followed by contractionary macroeconomic responses and systematic movements in financial-market prices. These findings underscore the important role of communication in shaping expectations and influencing economic outcomes.
- JEL Code
- E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
- 12 October 2026
- WORKING PAPER SERIES - No. 3297Details
- Abstract
- Fiscal integration in a currency union is generally understood as a transfer from fiscally strong to fiscally weak countries. I show that this changes when common debt is paired with a non-defaultable common tax, even if national debt remains defaultable. The risky country gains from intertemporal trade: it receives a grant financed by a perpetual obligation it discounts more heavily than lenders do. The cost to the safe member is second-order and the tax removes it by insuring imperfectly correlated cycles rather than transferring resources in expectation. The calibration delivers a narrow Pareto-improving region: the tax that eliminates the risky country’s perverse incentive to default is negligible, while the tax that compensates the safe country is an order of magnitude larger. Joint spending on a public good expands the region and reverses that ordering: the safe country gains even before the common budget balances.
- JEL Code
- F34 : International Economics→International Finance→International Lending and Debt Problems
F36 : International Economics→International Finance→Financial Aspects of Economic Integration
F45 : International Economics→Macroeconomic Aspects of International Trade and Finance
H63 : Public Economics→National Budget, Deficit, and Debt→Debt, Debt Management, Sovereign Debt
H87 : Public Economics→Miscellaneous Issues→International Fiscal Issues, International Public Goods - Network
- ECB Lamfalussy Fellowship Programme
- 12 October 2026
- SURVEY OF MONETARY ANALYSTS
- 8 October 2026
- RESEARCH BULLETIN - No. 147Details
- Abstract
- The impact of private equity buyouts on target firms is well documented, yet empirical evidence on the impact of buyouts across the supply chain remains scarce. We address this gap by using unique production network data to examine how supply chains contribute to the ability of private equity investors to create and extract value. We show that, on average, suppliers of firms backed by private equity outperform their peers because of increased demand for inputs from customers backed by private equity – rather than alternative mechanisms such as knowledge spillovers. In contrast, during economic downturns, while firms backed by private equity outperform their peers even more strongly, their suppliers show no signs of outperformance. This can be attributed to private equity investors exerting greater pressure on suppliers and more actively reconfiguring supply chains to achieve cost-savings for their portfolio companies during periods of economic distress. Finally, beyond their impact on suppliers, we also show that private equity buyouts create crowding-out effects for competitors that rely on common suppliers.
- JEL Code
- D22 : Microeconomics→Production and Organizations→Firm Behavior: Empirical Analysis
D24 : Microeconomics→Production and Organizations→Production, Cost, Capital, Capital, Total Factor, and Multifactor Productivity, Capacity
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
G34 : Financial Economics→Corporate Finance and Governance→Mergers, Acquisitions, Restructuring, Corporate Governance
- 7 October 2026
- WORKING PAPER SERIES - No. 3296Details
- Abstract
- This paper develops novel firm-level measures of shareholder geographical concentration and examines how elevated home bias in equity holdings affects investment resilience in the euro area. We combine security-level holdings data from the ECB’s Securities Holdings Statistics (SHS-S) with firm-level financial-statement data from Compustat, and document that equity ownership remains strongly concentrated domestically, with limited cross-border diversification within the monetary union. Using a difference-in-differences design around the COVID-19 shock, combined with a propensity score matching approach, we then analyse whether equity home bias shapes firms’ responses to macroeconomic disruptions. Against an average 16% decline in exports among the firms in the sectors most affected by the pandemic, those with more concentrated, home-biased shareholder bases reduced investment by 20% more than their more diversified peers after the shock. The effect operates mainly through weaker equity resilience, with equity declining by 13%, while sales and bank financing remain comparable. Our findings highlight the benefits of deeper cross-border equity integration for corporate resilience.
- JEL Code
- F36 : International Economics→International Finance→Financial Aspects of Economic Integration
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
G15 : Financial Economics→General Financial Markets→International Financial Markets
D22 : Microeconomics→Production and Organizations→Firm Behavior: Empirical Analysis
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
- 7 October 2026
- WORKING PAPER SERIES - No. 3295Details
- Abstract
- We introduce two indicators to track the build-up of vulnerabilities in the euro area banking sector on a quarterly basis by leveraging the information collected in EU-wide solvency stress tests. First, we introduce an indicator of conditional capital depletion, the Stress Vulnerability Index (SVI), which quantifies potential losses under adverse scenarios when tail credit risk is highest. Second, we introduce an indicator of earnings vulnerability, the Profitability Vulnerability Index (PVI), which assesses the capacity of the banking sector to generate capital organically. While the two indices spike synchronously during systemic crises, they can also decouple. We show that this occurs when tail risks to capital subside but earnings remain compressed, or conversely, when recessionary fears mount while current profitability strengthens. These divergences provide actionable signals for macroprudential policy by distinguishing between the accumulation of solvency risks and the impairment of loss absorption capacity. In doing so, the indices support decisions on the activation, build-up, stability or release of prudential buffers. We validate the usefulness of the indicators by showing that both indicators were strongly associated with the probability that euro area banks received state aid in the aftermath of the Great Financial Crisis.
- JEL Code
- E61 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Policy Objectives, Policy Designs and Consistency, Policy Coordination
G01 : Financial Economics→General→Financial Crises
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
- 7 October 2026
- OTHER PUBLICATION
- 6 October 2026
- OCCASIONAL PAPER SERIES - No. 400Details
- Abstract
- After the global financial crisis, all EU countries have developed within their jurisdictions a dedicated macroprudential pillar of financial oversight, in line with EU regulations and recommendations. However, governance structures differ, reflecting country-specific rationales and path-dependent choices. This paper provides an overview of the various institutional and operational frameworks for macroprudential policy in EU countries. This overview aims to deliver insights on the key aspects of these frameworks and their impact on the use of macroprudential policy. The analysis is based on i) a literature review, ii) a stocktaking exercise based on a survey among EU Member States and iii) country deep dives.
- JEL Code
- G18 : Financial Economics→General Financial Markets→Government Policy and Regulation
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
- 5 October 2026
- WORKING PAPER SERIES - No. 3294Details
- Abstract
- This paper investigates the information content of the term structure of inflation risks and its usefulness for understanding inflation dynamics. Using prices of traded zero-coupon inflation caps and floors, we develop a robust non-parametric methodology, combined with a Student’s t-copula, to estimate spot and forward risk-neutral densities at short-, medium-, and long-term horizons, i.e., long-horizon risks are identified from liquid instruments alone, at daily frequency, without forward-starting contracts. Focusing on the euro area over 2009-2026, we show that the term structure of inflation risks provides valuable information about the persistence of inflation shocks and the degree to which changes in the inflation outlook become embedded at longer horizons. We also show that there is marked heterogeneity in the macroeconomic and financial conditions associated to inflation risks across horizons: short- and medium-term risks are mainly associated with current inflation, confidence indicators, commodity prices, and near-term macroeconomic risks, whereas long-term risks are more strongly related to monetary and financial conditions. These findings highlight the importance of analysing the entire term structure of inflation risks rather than relying on a single maturity.
- JEL Code
- G13 : Financial Economics→General Financial Markets→Contingent Pricing, Futures Pricing
E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
- 5 October 2026
- WORKING PAPER SERIES - No. 3293Details
- Abstract
- Leveraging the unique setting of unilateral euroisation, this paper examines the spillover effects of euro area monetary policy on Montenegro and Kosovo. Through the lens of a structural VAR model with block exogeneity, it shows that euro area monetary policy shocks can significantly influence output and inflation in these economies, albeit with a delayed response, while contributing only modestly to their overall business cycle fluctuations.
- JEL Code
- C11 : Mathematical and Quantitative Methods→Econometric and Statistical Methods and Methodology: General→Bayesian Analysis: General
C32 : Mathematical and Quantitative Methods→Multiple or Simultaneous Equation Models, Multiple Variables→Time-Series Models, Dynamic Quantile Regressions, Dynamic Treatment Effect Models, Diffusion Processes
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
- 1 October 2026
- WORKING PAPER SERIES - No. 3292Details
- Abstract
- High-frequency interest rate surprises around Fed announcements do not identify monetary policy (MP) shocks if markets are imperfectly informed. Instead, they can also reflect central bank information (CBI) shocks, when the Fed assesses the economy differently, and Fed-response-to-news (FRN) shocks, when markets misperceive the policy rule. The literature treats these as competing explanations; we show they are distinct, and jointly identify all three from the co-movement of interest rate and equity surprises, their predictability from public news, and heteroskedasticity between FOMC and non-FOMC communication. CBI effects are robust at daily and monthly frequencies; FRN matters only daily. Purging both strengthens monetary policy estimates.
- JEL Code
- E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
Interest rates
| Deposit facility | 2,50 % |
| Main refinancing operations (fixed rate) | 2,65 % |
| Marginal lending facility | 2,90 % |
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