Households respond more forcefully to rate cuts than QE – Dallas Fed

Fed should improve communications for QE and forward guidance, researchers say

Federal Reserve Bank of Dallas
Photo: Andreas Praefcke

Unconventional monetary policy adjustments have less of impact on household economic confidence than interest rate adjustments, a paper published by the Dallas Fed finds.

Daniel Lewis, Christos Makridis and Karel Mertens use daily survey data from 2008 to 2017 to assess whether surprise monetary policy adjustments influence US households’ beliefs about economic conditions.

They find that interest rate adjustments have a significant and immediate impact on households’ economic confidence. A 25

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