Irish brief examines relationship between rate changes and bond yields
Note investigates how central banks influence term structure of interest rates
Unanticipated changes in the Swiss National Bank's (SNB) key policy rate affects government bonds further out on the yield curve than similar changes in the European Central Bank's (ECB) key rate, according to an economic letter published by the Central Bank of Ireland today.
In Operational targets and the yield curve: the euro area and Switzerland, Danielle Kedan and Rebecca Stuart note that, when setting monetary policy, central banks "seek to affect the entire term structure of interest rates"
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