Threats to central bank independence: High-frequency identification with twitter

A high-frequency approach is used to analyze the effects of President Trump’s tweets that criticize Federal Reserve on financial markets. Identification exploits a short time window around precise timestamp for each tweet. The average effect expected fed funds rate negative and statistically significant, with magnitude growing by horizon. also lead an increase in stock prices decrease long-term U.S. Treasury yields. VAR evidence shows had important impact actual monetary policy, market, bond premia, macroeconomy.