Policy rate forecasts influence expectations – Riksbank paper
New data allows researcher to assess “potency” of rate forecasts
Sveriges Riksbank has now published forecasts for its policy rate for 10 years, and it appears the forecasts do have an impact on market expectations of monetary policy, according to a working paper published on May 29.
Author Magnus Åhl notes that that there has only recently been enough data accrued to allow the impact of rate forecasts to be studied. His regression analysis of the impact of the Swedish central bank’s forecasting on market expectations finds the forecasts do indeed affect
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