Title: How much information monetary policy committees disclose: Evidence from the FOMCs minutes and transcripts
Authors: Marianna Blix Grimaldi - Swedish National Debt Office (Sweden) [presenting]
Isaiah Hull - Sveriges Riksbank (Sweden)
Mikael Apel - Sveriges Riksbank (Sweden)
Abstract: The purpose of central bank minutes is to give an account of monetary policy meeting discussions to outside observers, thereby enabling them to draw informed conclusions about future policy. However, minutes are a shortened and edited representation of a broader discussion by necessity. Consequently, they may omit information that is predictive of future policy decisions. To investigate this, we compare the predictive content of the FOMCs minutes and transcripts, focusing on three dimensions which are likely to be excluded from the minutes: 1) the committee's degree of hawkishness, 2) the chairperson's degree of hawkishness, and 3) the level of agreement between committee members. We measure committee and chairperson hawkishness with a novel dictionary that is constructed using the FOMCs minutes and transcripts. The agreement is measured using a novel technique that we import from the machine learning literature. We show that transcripts contain information that is not included in the minutes and is not contained in macroeconomic and financial variables. We also add evidence that the FOMC attempts to build an internal consensus before tightening monetary policy.