BIS central bankers’ speeches  3  However, the central channel of spillovers from US monetary policy appears to be via capital markets. 9 In fact, US monetary policy has large financial spillovers, especially to European bond markets. German nominal bond yields, for example, follow the change of US bond yields in response to a US monetary policy tightening by more than one third.
10 Owing to the role of the US dollar in emerging economies’ integration with global financial markets, spillovers through valuation effects, “original sin” and financial accelerator mechanisms, are much stronger than in the euro area. Overall, the evidence even suggests that spillovers from US monetary policy might be larger than the domestic effects in the US.