Abstract
This paper examines the dual impact of Federal Reserve monetary policy and its accompanying information statements on U.S. residential investments. Using a closed-economy IS-LM framework combined with cost-minimization models, the study tests the hypothesis that Fed interest rate decisions—when paired with forward guidance from FOMC announcements— significantly shape housing market dynamics and REIT returns. By analyzing four distinct scenarios that blend expansionary and contractionary policies with positive and negative informational cues, the research disentangles the direct effects of rate changes from the market’s response to qualitative economic signals. The study demonstrates how favorable information can counteract contractionary measures and negative information can weaken expansionary policies. The research demonstrates that Fed announcements act as a strong influence on investor behavior and market trends while disputing traditional beliefs about monetary policy success.
Advisor
Moledina, Amyaz
Department
Business Economics
Recommended Citation
Hammer, Andrew, "Federal Reserve Monetary Policy and Information Statements: What is the impact on U.S. Residential Investments?" (2025). Senior Independent Study Theses. Paper 11311.
https://openworks.wooster.edu/independentstudy/11311
Disciplines
Business
Keywords
Federal Reserve, Information Statements, FOMC
Publication Date
2025
Degree Granted
Bachelor of Arts
Document Type
Senior Independent Study Thesis
© Copyright 2025 Andrew Hammer