Critical for the identification of the shocks, analysts can update their forecasts up to the time of the monetary policy meeting to incorporate any information deemed relevant to the interest rate decision. [...] www.suerf.org/publications/ SUERF Policy Brief, No 872 2 Despite proverbial concerns, monetary policy wields considerable traction in emerging markets Monetary policy transmission to financial markets We start by examining the effects of monetary policy shocks on financial markets in the days following monetary policy decisions. [...] Figure 1: Financial market responses to a 1pp monetary policy shock Notes: The figure shows the effects of a one percentage point monetary policy shock on financial variables during the 30 days following the shock. [...] The transmission lags and the quantitative effects of monetary policy on macroeconomic conditions are broadly in line with the evidence from the US presented in Bauer and Swanson (2023). [...] www.suerf.org/publications/ SUERF Policy Brief, No 872 3 Despite proverbial concerns, monetary policy wields considerable traction in emerging markets Figure 2: Macroeconomic responses to a 1pp monetary policy shock Notes: The figure shows the effects of a one percentage point monetary policy shock on macroeconomic variables during the 36 months following the shock.
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