Monetary Policy Surprises and Monetary Policy Uncertainty
Posted: 6 Jun 2018 Last revised: 21 Feb 2019
Date Written: 2018-05-18
In this note we find that after a given monetary policy surprise, primary dealers--key intermediaries in interest rate markets--tend to adjust their positions in the U.S. Treasury market and their exposures to interest rates more when the prevailing level of policy uncertainty is low than when it is high.
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