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Heterogeneous effects of monetary policy surprises on bond fund flows

Author

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  • Sébastien Blanco
  • Miriam Koomen
  • Pinar Yesin

Abstract

We present novel evidence on the global transmission of monetary policy (MP) surprises via bond funds. Using daily MP surprise measures and a multi-country panel of weekly fund flows, we document that bond fund flows respond systematically to MP surprises. The direction, intensity, and persistence of these responses, however, vary across destination countries, fund investment strategies, and fund domiciles. Furthermore, bond fund flows react not only to domestic MP surprises, but also to foreign MP surprises, indicating cross-border spillovers. We explore two mechanisms driving these responses: the relative importance of MP shocks versus information shocks, and the impact of exchange rate movements on portfolio rebalancing. Our findings highlight the role of nonbank financial intermediaries in global MP transmission.

Suggested Citation

  • Sébastien Blanco & Miriam Koomen & Pinar Yesin, 2026. "Heterogeneous effects of monetary policy surprises on bond fund flows," Working Papers 2026-01, Swiss National Bank.
    • Handle: RePEc:snb:snbwpa:2026-01
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    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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