We analyze how Brazilian financial markets, in particular futures interest rates, react to monetary policy both in terms of deeds, i.e. changes in the policy rate, and words, i.e. central bank communication. Using daily data from 2005 to 2014, we find that the futures interest rates react in the...

We analyze how Brazilian financial markets, in particular futures interest rates, react to monetary policy both in terms of deeds, i.e. changes in the policy rate, and words, i.e. central bank communication. Using daily data from 2005 to 2014, we find that the futures interest rates react in the...

During the past few years, monetary policy communication has become a hot topic in as far as it seems to have become a very relevant way for central banks to guide markets, beyond actual monetary policy decisions. This paper investigates this issue empirically for the case of Chile. More...