Fed working paper measures FOMC comms effect against theory of UIP

federal reserve

A highly technical working paper from the US Federal Reserve proposes a new "identification strategy" to measure the extent to which statements by the Federal Open Market Committee (FOMC) cause changes in exchange rates and interest rates, consistent with the theory of uncovered interest parity (UIP), which states that the difference in interest rates between two countries is equal to the expected change in exchange rates between the countries' currencies.

Michael Kiley, the author of the paper

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