The Impact of Conventional and Unconventional Monetary Policy on Investor Sentiment

Published in Journal of Banking & Finance, 2015

Key Highlight: During conventional times, a surprise decrease in the fed funds rate leads to a large increase in investor sentiment. Similarly, expansionary unconventional monetary policy shocks also have a large and positive impact on investor mood. Together, findings highlight the importance of both conventional and unconventional monetary policy in the determination of investor sentiment.