How uncertain is the fed’s forward guidance? text-based evidence from earnings calls and corporate investment

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dc.contributor.authoraltunöz, utku
dc.date.accessioned2026-04-25T14:13:19Z
dc.date.available2026-04-25T14:13:19Z
dc.date.issued2026
dc.departmentSinop Üniversitesi
dc.description.abstractThis study investigates the impact of receiver-side forward-guidance uncertainty (FGU) on corporate investment in the United States. Using over 80,000 earnings-call transcripts from S&P 1500 firms between 2010Q1 and 2025Q2, we employ FinBERT—a finance-specific large language model—to construct a novel firm-quarter FGU index that captures managerial perceptions of Federal Reserve policy signals. We estimate panel fixed-effects and instrumental-variable models to address endogeneity concerns, finding that a one-standard-deviation increase in lagged FGU reduces the capital-expenditure-to-assets ratio by 0.6–0.9 percentage points, with stronger effects among financially constrained and interest-rate-sensitive firms. Robustness checks, alternative specifications, and dynamic local projections confirm the persistent and economically significant drag on investment. Translating firm-level elasticities to aggregate terms, an interquartile FGU rise implies a USD 12 billion quarterly reduction in U.S. nonresidential private investment. Our findings underscore that clarity, consistency, and credibility in central-bank communication are critical for sustaining real-sector investment. © The Author(s), under exclusive licence to Springer Nature B.V. 2025.
dc.identifier.doi10.1007/s11135-025-02510-2
dc.identifier.endpage5858
dc.identifier.issn0033-5177
dc.identifier.issue2
dc.identifier.scopus2-s2.0-105024685588
dc.identifier.scopusqualityQ1
dc.identifier.startpage5843
dc.identifier.urihttps://doi.org/10.1007/s11135-025-02510-2
dc.identifier.urihttps://hdl.handle.net/11486/8007
dc.identifier.volume60
dc.indekslendigikaynakScopus
dc.institutionauthoraltunöz, utku
dc.language.isoen
dc.publisherSpringer Science and Business Media B.V.
dc.relation.ispartofQuality and Quantity
dc.relation.publicationcategoryMakale - Uluslararası Hakemli Dergi - Kurum Öğretim Elemanı
dc.rightsinfo:eu-repo/semantics/closedAccess
dc.snmzKA_Scopus_20260420
dc.subjectCorporate investment
dc.subjectEarnings calls
dc.subjectFederal reserve
dc.subjectFinBERT
dc.subjectForward guidance
dc.subjectMonetary policy
dc.subjectNatural language processing
dc.subjectPolicy uncertainty
dc.titleHow uncertain is the fed’s forward guidance? text-based evidence from earnings calls and corporate investment
dc.typeArticle

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