'Liked', 'Shared', 'Commented': Central Bank Communication on Facebook and Twitter

This study is a comprehensive analysis of the Federal Reserve System (FED) communication on social media and its effectiveness. Our examination shows that although the FED uses both Twitter and Facebook for public outreach, communication via Twitter is more popular and gains greater public engagement. There are heterogeneous effects across different topics of the FED's social media posts, post types, as well as across Twitter user groups. The general public is most active in engaging with the FED accounts, followed by media, investors, academics, and government accounts. Further investigation suggests inconclusive evidence of stock market reactions to the FED communication on social media. However, market participants do update their inflation expectations based on information contained in the FED's social media posts.