Joint research unit 7235

Media Perception of Fed Chair’s Overconfidence and Market Expectations

Hamza Bennani

This paper aims to assess the impact of media perception of Fed chair’s overconfidence on market expectations. We first use a media-based proxy to compute a measure of Fed chair’s overconfidence for the period 1999M01-2017M07, the overconfidence indicator. The overconfidence indicator provides a measure of the perceived overconfidence of the Fed chair by the media, and thus, by financial market participants. We relate this variable to inflation and unemployment expectations of market participants. Our results show that an overconfident Fed chair is associated with higher inflation expectations and lower unemployment expectations. These findings are robust to (i) the macroeconomic forecasts used to extract the exogenous component of the media-based proxy reflecting Fed chair’s overconfidence, (ii) different measures of the media-based proxy used to quantify Fed chair’s overconfidence and (iii) different measures of inflation expectations. These findings shed some new light on the impact of central bankers’ personality on market expectations, and thus, on the effectiveness of their monetary policy decisions.

AGENDA

Tuesday 5 December 2023

Recherche et Economie et Socioéconomie Politique, des Institutions et des Régulations (RESPIR)

Clément Fontan (UC Louvain)

The ECB and the inflation monsters: strategic framing and the responsibility imperative (1998-2023)

Tuesday 5 December 2023

The ECB and the inflation monsters: strategic framing and the responsibility imperative (1998-2023)

Clément Fontan (UC Louvain)

The ECB and the inflation monsters: strategic framing and the responsibility imperative (1998-2023)

Thursday 7 December 2023

Groupe de travail Economie Comportementale

Vincent Lenglin (Université Catholique de Lille)

TBA

Thursday 7 December 2023

TBA

Vincent Lenglin (Université Catholique de Lille)

TBA

Thursday 7 December 2023

Explaining economic performances in the French employment zone: spatial externalities and related variety

Emmanuelle Faure

Explaining economic performances in the French employment zone: spatial externalities and related variety

Thursday 7 December 2023

Doctorants

Emmanuelle Faure

Explaining economic performances in the French employment zone: spatial externalities and related variety

Monday 11 December 2023

Law, Institutions and Economics in Nanterre (LIEN)

Bastien Michel (LEMNA, Nantes)

Measuring the Impact of Incarceration on Recidivism in Denmark

Monday 11 December 2023

Measuring the Impact of Incarceration on Recidivism in Denmark

Bastien Michel (LEMNA, Nantes)

Measuring the Impact of Incarceration on Recidivism in Denmark

Inscription aux Newsletters

Newsletter subscription