The largest market reactions occurred after announcements in late 2008 and early 2009 associated with the initial program of quantitative easing, commonly referred to as QE1, likely at least in part because global financial conditions were extremely stressed at that time, but also perhaps because QE1 demonstrated that it was still possible to ease policy, even when the federal funds rate was constrained by its effective lower bound.
11 Although much of the recent commentary on spillovers has focused on the United States, it bears mentioning that other countries’ monetary policy announcements can leave an imprint on international asset prices, with market reactions to new initiatives announced by the European Central Bank (ECB) in the past few weeks the most recent example.