Discount rate changes and security returns in the U.S., 1962-1991

Article Abstract:

The trend in stock returns between the years 1962 and 1991 is analyzed in relation to monetary policy announcements. Analysis results show that the direction of the discount rate changes roughly determines the degree and volatility of stock market performance. Decreases in discount rates generated periods characterized by higher and more stable changes in stock returns than did increases in discount rates. Nevertheless, stock market trends cannot automatically be considered a direct offshoot of interest rate policies.

Economic aspects, Financial markets, Discount rates

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Federal Reserve monetary policy and industry stock returns

Article Abstract:

An analysis of changes in the Federal Reserve discount rates was effected to study the impact of monetary policy changes on short-term and long-term market stock returns across 16 industry stock indices. The results were consistent with the findings of G.R. Jensen and R.R. Johnson who revealed patterns in stock returns which were consistent with discount rate changes. The short-term and long-term results showed positive response to rate decreases while showing negative response to rate increases.

Public Finance Activities, Federal Reserve System, Economic policy, United States. Federal Reserve Board, Stock price indexes, Return on investment, Rate of return

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Monetary environments and international stock returns

Article Abstract:

Foreign stock returns are found to be generally higher in expansive US and local monetary environments than in restrictive environments. Such finding shows that local stock returns are substantially related to local monetary conditions. A relationship was also established between foreign stock returns and the US monetary environments as several foreign markets exhibited substantially higher returns when the Federal Reserve followed an expansive policy.

Securities and Commodity Exchanges, Security and commodity exchanges, Securities Exchanges, Stock-exchange, Stock exchanges, Exchanges

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