Heterogeneous effects of monetary policy surprises on bond fund flows

Sébastien Blanco, Miriam Koomen and Pinar Yesin

No 2026-01, Working Papers from Swiss National Bank

Abstract: We present novel evidence on the global transmission of monetary policy (MP) surprises via bond funds. Using daily MP surprise measures and a multi-country panel of weekly fund flows, we document that bond fund flows respond systematically to MP surprises. The direction, intensity, and persistence of these responses, however, vary across destination countries, fund investment strategies, and fund domiciles. Furthermore, bond fund flows react not only to domestic MP surprises, but also to foreign MP surprises, indicating cross-border spillovers. We explore two mechanisms driving these responses: the relative importance of MP shocks versus information shocks, and the impact of exchange rate movements on portfolio rebalancing. Our findings highlight the role of nonbank financial intermediaries in global MP transmission.

Keywords: NBFIs; Bond funds; Monetary policy surprises; Cross-border spillovers (search for similar items in EconPapers)
JEL-codes: E44 E52 G23 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:snb:snbwpa:2026-01

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