The market reaction to federal reserve policy action from 1989 to 1992

Vincent Reinhart, Timothy Simin

Research output: Contribution to journalArticlepeer-review

26 Scopus citations


An examination of the market reaction to Federal Reserve policy easings from 1989 to 1992 suggests that these actions were mostly unexpected and were not viewed to be persistent. Changes in the intended trading range for the federal funds rate had their greatest impact on the near-term outlook, but those effects diminished as the investing horizon lengthened. By this interpretation, any change in longer-term interest rates was mostly owed to the consequences of lower near-term rates, not to any substantial revision to the longer-run outlook. Most significantly, the range of reaction was remarkably wide across all markets.

Original languageEnglish (US)
Pages (from-to)149-168
Number of pages20
JournalJournal of Economics and Business
Issue number2
StatePublished - 1997

All Science Journal Classification (ASJC) codes

  • General Business, Management and Accounting
  • Economics and Econometrics


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