How Informative Are Central Bank Minutes?

One characteristic feature of central banks today is that policy decisions are almost

exclusively made by a committee rather than by a single policy maker. Another is that

central banks endeavour to be transparent. Together, this has brought to the fore an

important but so far unresolved issue: how much information about the committee’s

deliberations should the central bank reveal? Does this kind of information make

monetary policy easier to understand and predict, or does it make it harder? We address this issue by employing a novel method. We measure the sentiment and tone of the minutes of the Swedish central bank using an automated content analysis that

converts the qualitative information in the minutes to a quantitative measure. We find

that this measure is helpful in predicting future policy rate decisions.