Fed communication drives house price expectations – NBER paper

Jerome Powell

The authors find non-verbal cues matter during Fed press conferences

The communication of US Federal Reserve interest rate decisions can drive expectations of house price movements, but clear explanations of transmission channels are “crucial”, researchers find.

Carola Binder, Pei Kuang and Li Tang conducted a randomised control trial using an online survey of US consumers. Respondents were allocated randomly to three groups and asked to give forecasts of house price changes and a few other key variables. They then received “information treatment” so the

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