Date of Award
Business, Accounting, & Economics
Brian Day, CPA
First Committee Member
Dr. Dennis Whalen
Second Committee Member
Dr. Halard Lescinsky
Finance, Federal Reserve, Money Supply, Interest Rate, Economics
Finance and Financial Management | Higher Education
With the growing age of the tech economy, post housing crash financial market, and unprecedented challenges like a global pandemic with a death toll in the millions, major financial institutions in the United States have been forced to reconsider many aspects of the old ways of doing things. The most influential institution in the U.S., the Federal Reserve (the Fed), has become more involved with the financial markets over the past several decades. Using a sample of 134 publicly-traded companies, I analyzed variables to assess the effects of the Fed’s new influence on market expectations from the past ten years. These variables include the money supply and the Federal Funds Futures, two variables that have become major hints in economic and market expectations. The other two variables, the stock market and a dummy variable for non-large-cap companies, account for asset pricing factors in the study. The results show there is a significant effect on a stock’s annual rate of return by variables the Fed controls.
McFarland, Patrick, "A Study on the Federal Reserve’s Influence on the Stock Market" (2021). Undergraduate Honors Thesis Projects. 126.