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The effect of FOMC votes on financial markets

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Publication details

JournalReview of economics and statistics
DateAccepted/In press - 15 Aug 2018
DatePublished (current) - 11 Dec 2019
Issue number5
Pages (from-to)921-932
Original languageEnglish


This article shows that since votes of FOMC members have been included in press statements, stock prices increase after the announcement when votes are unanimous but fall when dissent (which typically is due to preference for higher interest rates) occurs. This pattern started prior to the 2007--2008 financial crisis. The differences in stock market reaction between unanimity and dissent remain even controlling for the stance of monetary policy and consecutive dissent. Statement semantics also do not seem to explain the documented effect. We find no differences between unanimity and dissent with respect to impact on market risk and Treasury securities.

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© 2018 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology. This is an author-produced version of the published paper. Uploaded in accordance with the publisher’s self-archiving policy. Further copying may not be permitted; contact the publisher for details.

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