The effects of monetary policy on stock returns: Financing constraints and “informative” and “uninformative” FOMC statements

We also find that the response of stock returns to a negative target surprise is significant. However, the response to a positive target surprise is insignificant, which implies that market investors respond more rationally to good news (negative target surprises) than to bad news (positive target surprises). For a good news monetary shock, informative statements have larger impacts on stock returns than uninformative statements. However, for a bad news monetary shock, neither informative nor uninformative statements have significant impacts on stock returns.