Perceptions About Monetary Policy*.

This article focuses on estimating the perceived monetary policy rule of the U.S. Federal Reserve using nearly four decades of professional forecasters' survey data from the Blue Chip Financial Forecasts. It finds that forecasters' perceptions of the Fed's responsiveness to economic conditions, particularly the output gap, vary substantially over time and across monetary policy cycles, reflecting incomplete information and learning from Federal Open Market Committee (FOMC) actions. These shifting perceptions influence financial markets by affecting the sensitivity of interest rates to macroeconomic news, term premia in long-term bonds, and stock market reactions to monetary policy surprises. A simple learning model with heterogeneous forecasters rationalizes these findings, highlighting the role of evolving beliefs about the Fed's policy rule in monetary transmission and asset pricing.