The Effect of the Federal Funds Futures and Changes in Federal Reserve Monetary Policy on Stock Markets: A Sector-Wise Analysis

Authors

Kunaey Garg, Illinois Wesleyan University

Abstract

This study will perform a sector-wise analysis of the reaction of stock markets to anticipated and unanticipated monetary policy changes. The analysis will be conducted by observing the reactions of the financial, energy, utilities, materials, industrials, consumer discretionary, consumer staples, information technology, and telecommunications sectors to changes in monetary policy. Since there is a more direct connection between Fed policy and the financial sector of the economy, this allows a hypothesis stating that the financial sector’s stock prices will be the most responsive to changes in monetary policy. The results of this analysis and the conclusions derived from these results are reported in the final sections of this paper.

Recommended Citation

Garg, Kunaey (2008) "The Effect of the Federal Funds Futures and Changes in Federal Reserve Monetary Policy on Stock Markets: A Sector-Wise Analysis," The Park Place Economist: Vol. 16
Available at: https://digitalcommons.iwu.edu/parkplace/vol16/iss1/13