Information acquisition ahead of monetary policy announcements

Exploiting the “quiet period” before European Central Bank (ECB) announcements, this paper studies ECB-related content on X/Twitter to better understand how investors acquire information about upcoming monetary policy decisions in the absence of central bank signals. We first document that attention is endogenous, as tweet traffic positively correlates with the magnitude of subsequent monetary policy surprises. Second, when there is large disagreement about the economic outlook, more tweet traffic is associated with an improved accuracy of market expectations already during the quiet period, thereby leading to smaller monetary policy surprises. This suggests that information exchange can improve expectation formation.