Similar results obtain for the correlation of U.S. yields with yields of other industrial countries, including Canada, the United Kingdom, and Japan. That interdependence suggests that monetary policy makers must pay attention to conditions abroad as well as at home.
However, the greater analytical complexity and interdependence associated with the globalization of financial markets notwithstanding, both theory and – perhaps more persuasively – recent experience support the view that the Federal Reserve retains considerable leverage over longer-term rates and key asset prices, although the links from monetary policy decisions to longer-term rates are somewhat looser than those to short-term rates.