Bernoth, Kerstin Dany-Knedlik, Geraldine Gibert, Anna
Year of Publication:
DIW focus 3
To cushion the economic effects of the coronavirus pandemic, central banks havetaken far-reaching monetary policy measures. The US Federal Reserve has loweredits interest rates and, like the European Central Bank, has expanded its bond pur-chase programs. However, it is questionable whether these measures are having thedesired effect of calming the markets and supporting the real economy. It is truethat the macroeconomic effects cannot yet be quantified, but initial indications oftheir effectiveness can be seen in the short-term reactions of stock prices and bondyields. The following article shows how interest rates and prices have reacted direct-ly to the central bank announcements and what conclusions can be drawn from thisfor future measures.