Atlanta Fed, Report: An Update on Bond Market Dynamics

“To conclude, global central banks have responded to the large and persistent inflation surge over the last two years by engaging in a rapid tightening cycle. This “coordinated” global monetary policy reaction is potentially magnifying financial tightness whose time-series and cross-country cumulative effects are difficult to assess in real time because of potential nonlinearities in the transmission mechanism, highly financialized and indebted economies, levered financial systems with pervasive frictions, etc. Synthesizing information from bond prices and term structure models provides valuable real-time guidance for policy makers and market participants.”