Perceptions of monetary policy determine long-term bond yields, IMF paper finds
Rise in yields following Fed ‘taper talk' in 2013 due to monetary policy shock
The sharp rise in 10-year Treasury bond yields that followed the Federal Reserve's ‘taper talk' in May 2013 was due largely to monetary policy shocks, with the impact of positive economic news becoming increasingly important in the following months, according to an IMF working paper.
News and monetary shocks at a high frequency: a simple approach, by Troy Matheson and Emil Stavrev, argues such results highlight the importance of perceptions about the current and future stance of monetary policy
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