Financial stability and the <scp>Fed</scp> : Evidence from congressional hearings

This article retraces how financial stability considerations interacted with US monetary policy before and during the Great Recession. Using text-mining techniques, this innovates by constructing indicators for sentiment expressed testimonies of five Federal Reserve Chairs. Including these text-based measures adds explanatory power to Taylor-rule models. Negative coincided a more accommodative stance than implied standard factors, even decades These findings are consistent preference reacting instability rather acting pre-emptively perceived build-up risks.