Monetary Policy and Firm-Level Uncertainty
16 Pages Posted: 30 Jan 2022
Date Written: January 14, 2022
Uncertainty at the firm-level falls on FOMC announcement days with substantial variation both across firms and over time. We find that this movement is not related to surprises about the expected path of the policy rate but rather to forward guidance driven changes in uncertainty around the expected path. The effect of this monetary policy uncertainty is attenuated for firms that have higher growth opportunities (as measured by Tobin's Q).
Keywords: Monetary policy transmission, firm level uncertainty
JEL Classification: E52, E44, E43, E58
Suggested Citation: Suggested Citation