The Impact of Conventional and Unconventional Monetary Policy on Investor Sentiment

Chandler Lutz

Research output: Contribution to journalJournal articleResearchpeer-review


This paper examines the relationship between monetary policy and investor sentiment across conventional and unconventional monetary policy regimes. During conventional times, we find that a surprise decrease in the fed funds rate leads to a large increase in investor sentiment. Similarly, when the fed funds rate is at its zero lower bound, research results indicate that expansionary unconventional monetary policy shocks also have a large and positive impact on investor mood. Together, our findings highlight the importance of both conventional and unconventional monetary policy in the determination of investor sentiment.
Original languageEnglish
JournalJournal of Banking & Finance
Pages (from-to)89-105
Number of pages17
Publication statusPublished - Dec 2015

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