Economic news typically leads to adjustments in the prices of financial assets. For example, the release of a new report on inflation might prompt investors to expect higher interest rates in the future. This would lead to an increase in the yields on U.S. Treasury securities, federal funds futures, and Eurodollar futures. Similarly, the release of a new nonfarm payrolls report might cause the value of the dollar to rise or fall.
We study how economically significant and measurably persistent asset price responses to economic news are through the use of dynamic panel data. Using this method, we find that only a few economic announcements — such as nonfarm payrolls, the GDP advance release, and a private sector manufacturing report — generate price responses that are both economically significant and measurably persistent. These effects are strongest in the bond market and weakest in stock markets.
The economy remains on solid footing despite fears of rising consumer prices due to President Trump’s tariffs, according to the latest jobs report. But with a trade agreement between Canada and the US in sight, that doesn’t necessarily mean that the threat of higher prices will be lifted. Plus, NBC News looks at how the cost of pet services like grooming and dog walking is rising twice as fast as food and leashes. And a new study finds that homeowners in minority communities face steeper property taxes, which can sometimes force them from their homes.