SFS Cavalcade North America 2026
Darden Graduate School of Business Administration, University of Virginia
May 18-21, 2026
Conference Agenda
Overview and details of the sessions of this conference. Please select a date or location to show only sessions at that day or location. Please select a single session for detailed view (with abstracts and downloads if available).
Please note that all times are shown in the time zone of the conference. The current conference time is: 18th Apr 2026, 05:18:27am EDT
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Agenda Overview |
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Track T6-6: Monetary Policy
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A Model of Fed Information Effect University of Wisconsin-Madison Abstract: A significant fraction of measured surprise central bank interest rate hikes is associated with simultaneous stock market run-ups and upward revisions in economic growth forecasts. This evidence is often interpreted as contradicting the standard New Keynesian transmission mechanism and as indicating that the Fed possesses superior information about economic fundamentals. We present a New Keynesian model in which investors are uncertain about the Fed’s long-run monetary policy objectives and learn from observed Fed actions. Our model does not assume that the Fed has superior information, but it nonetheless generates a “Fed information effect,” that is, a positive co-movement between interest rate surprises, revisions in expected growth, and stock returns as an equilibrium outcome. We show that the key predictions of our model are consistent with empirical evidence on asset market responses to measured Fed information shocks.
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