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When Bankers Go to Hail: Insights into Fed–Bank Interactions from Taxi Data

Author

Listed:
  • Daniel Bradley

    (Department of Finance, University of South Florida, Tampa, Florida 33620)

  • David Andrew Finer

    (Independent Researcher)

  • Matthew Gustafson

    (Department of Finance, Penn State University, State College, Pennsylvania 16802)

  • Jared Williams

    (Department of Finance, University of South Florida, Tampa, Florida 33620)

Abstract

We introduce taxi ridership between the Federal Reserve (Fed) Bank of New York and large financial institutions headquartered in New York City as a novel proxy for Fed–bank face-to-face interactions. We document a negative relation between past Fed–bank interactions and future stock market returns, particularly on days around the Fed’s public announcements. We also find significantly elevated Fed–bank interactions immediately following the lifting of the Federal Open Market Committee blackout. Our findings suggest that the Fed increases its information gathering via face-to-face interactions when it possesses negative private information about the condition of the economy.

Suggested Citation

  • Daniel Bradley & David Andrew Finer & Matthew Gustafson & Jared Williams, 2024. "When Bankers Go to Hail: Insights into Fed–Bank Interactions from Taxi Data," Management Science, INFORMS, vol. 70(8), pages 4995-5015, August.
    • Handle: RePEc:inm:ormnsc:v:70:y:2024:i:8:p:4995-5015
    DOI: 10.1287/mnsc.2023.4885
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