Research on the Transmission Mechanism of Monetary Policy Shocks to Fixed-Income Market Prices

Xuan Xuan ()
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Xuan Xuan: Macau University of Science and Technology

A chapter in Proceedings of the 2026 6th International Conference on Enterprise Management and Economic Development (ICEMED 2026), 2026, pp 417-423 from Springer

Abstract: Abstract The fixed-income market acts as a core carrier for social capital allocation and a pivotal hub for monetary policy transmission. Its price formation mechanism directly determines the financing cost of the real economy and the stability of macroeconomic performance. Against the background of China’s continuous advancement in interest rate liberalization, this paper focuses on the transmission mechanism of monetary policy shocks to fixed-income market prices. It systematically analyzes the transmission pathways and intrinsic mechanisms through which monetary policy shocks affect fixed-income market prices, and identifies the factors influencing transmission efficiency. The study finds that monetary policy exerts a synergistic impact on fixed-income market prices via four channels: interest rate, liquidity, credit and expectation. However, the transmission effect is constrained by multiple factors, including the maturity of interest rate liberalization, market liquidity segmentation, asset allocation behaviors of financial institutions, policy expectation management and macroeconomic cycles. This paper clarifies the transmission logic and constraints of monetary policy on fixed-income market prices, providing theoretical and practical references for optimizing monetary policy and promoting the sound development of the fixed-income market.

Keywords: Monetary Policy; Fixed-Income Market; Transmission Mechanism (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6239-719-4_48

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DOI: 10.2991/978-94-6239-719-4_48

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