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Signals from unconventional monetary policy

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  • Michael D. Bauer
  • Glenn D. Rudebusch

Abstract

Federal Reserve announcements of future purchases of longer-term bonds may affect asset prices by changing market expectations of the future supply of targeted securities. Such announcements may also affect asset prices by signaling that the stance of conventional monetary policy is likely to remain loose for longer than previously anticipated. Research suggests that these signaling effects were a major contributor to the cumulative declines in Treasury security yields following the eight Fed announcements in 2008 and 2009 about its first round of large-scale asset purchases.

Suggested Citation

  • Michael D. Bauer & Glenn D. Rudebusch, 2011. "Signals from unconventional monetary policy," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue nov.21.
  • Handle: RePEc:fip:fedfel:y:2011:i:nov.21:n:2011-36
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    File URL: http://www.frbsf.org/publications/economics/letter/2011/el2011-36.html
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    File URL: http://www.frbsf.org/publications/economics/letter/2011/el2011-36.pdf
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    References listed on IDEAS

    as
    1. Michael A. S. Joyce & Ana Lasaosa & Ibrahim Stevens & Matthew Tong, 2011. "The Financial Market Impact of Quantitative Easing in the United Kingdom," International Journal of Central Banking, International Journal of Central Banking, vol. 7(3), pages 113-161, September.
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    Cited by:

    1. Sri Hari NAIDU. A & Phanindra GOYARI & Bandi KAMAIAH, 2016. "Determinants of sovereign bond yields in emerging economies: Some panel inferences," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(608), A), pages 101-118, Autumn.
    2. von Borstel, Julia & Eickmeier, Sandra & Krippner, Leo, 2016. "The interest rate pass-through in the euro area during the sovereign debt crisis," Journal of International Money and Finance, Elsevier, vol. 68(C), pages 386-402.
    3. Sri Hari NAIDU. A & Phanindra GOYARI & Bandi KAMAIAH, 2016. "Determinants of sovereign bond yields in emerging economies: Some panel inferences," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(608), A), pages 101-118, Autumn.
    4. Ellis W. Tallman & Saeed Zaman, 2012. "Where would the federal funds rate be, if it could be negative?," Economic Commentary, Federal Reserve Bank of Cleveland, issue Oct.

    More about this item

    Keywords

    Monetary policy ; Open market operations;

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