We empirically analyze firm‐level uncertainty generated from extreme weather events, guided by a theoretical framework. Stock options of firms with establishments in a hurricane's (forecast) landfall region exhibit large implied volatility increases, reflecting significant uncertainty (before) after impact. Volatility risk premium dynamics reveal that investors underestimate such uncertainty. This underreaction diminishes for hurricanes after Sandy, a salient event that struck the U.S. financial center. Despite constituting idiosyncratic shocks, hurricanes affect hit firms' expected stock returns. Textual analysis of calls between firm management, analysts, and investors reveals that discussions about hurricane impacts remain elevated throughout the long‐lasting high‐uncertainty period after landfall.

We study links between the labor market for loan officers and access to mortgage credit. Using novel data matching mortgage applications to loan officers, we find that minorities are underrepresented among loan officers. Minority borrowers are less likely to complete mortgage applications, have completed applications approved, and to ultimately take up a loan. These disparities are reduced when minority borrowers work with minority loan officers. These pairings also lead to lower default rates, suggesting minority loan officers have an informational advantage with minority borrowers. Our results suggest minority underrepresentation among loan officers reduces minority borrowers’ access to credit.