Global markets react dramatically to U.S. monetary policy changes.
The article examines how U.S. monetary policy affects global asset prices, focusing on whether unconventional policies have different impacts. The researchers analyze market reactions to Federal Reserve announcements before and after interest rates hit zero. They find that changes in U.S. monetary policy influence asset prices both domestically and internationally. However, the effects of policy changes at the zero lower bound are not consistent across all asset classes.