In recent times, global shocks have also been consequential for U.S. economic prospects and monetary policy. Examples include the 2011–13 euro-zone recession and the China devaluation and capital flight episode of 2015 and ‘16, when worries about a hard landing and renminbi depreciation, respectively, roiled world markets.
Both of these shocks originated in economies with large footprints in the global economy and financial system, and, as a result, they induced substantial disruptions in global financial markets. During both episodes, U.S. stock markets fell and the dollar appreciated, especially during 2015 and 2016. As ever, these negative shocks were associated with safe-haven flows that pushed U.S. Treasury yields down.