https://macropaperwarehouse.com/authors/gustavo-suarez/Gustavo SuarezHugo -- gohugo.ioen-usWed, 01 Jan 2025 00:00:00 +0000https://macropaperwarehouse.com/papers/nonmonetary-news-in-fed-announcements-evidence-from-the-corporate-bond-market/Wed, 01 Jan 2025 00:00:00 +0000https://macropaperwarehouse.com/papers/nonmonetary-news-in-fed-announcements-evidence-from-the-corporate-bond-market/<p>When the Federal Reserve unexpectedly tightens policy, do riskier assets fall relative to safer ones (the standard prediction), or do investors read tightening as a signal that fundamentals are stronger than they believed, leading riskier assets to outperform? Smolyansky and Suarez answer this through the cross-section of the roughly $9 trillion U.S. corporate bond market, arguing it offers cleaner identification than survey-based evidence because asset prices already reflect all macro news just before an FOMC release—largely sidestepping the omitted-variable critique of Bauer and Swanson (2023) and Karnaukh and Vokata (2022).</p>