The preponderance of evidence suggests that the Fed’s asset purchases raised the prices of the assets purchased and close substitutes as well as those of riskier assets. 9 Importantly, evidence shows that foreign asset markets have been significantly affected by the Fed’s purchase programs.
10 For example, event studies of announcements associated with the Fed’s purchase programs have found that they prompted inflows into investment funds holding both foreign debt and foreign equity securities. Of course, other countries’ monetary policy announcements can also leave an imprint on international asset prices, with market reactions to new initiatives enacted by the European Central Bank (ECB) one recent example.