Secular declines in global sovereign yields are concentrated in short event windows around U.S. monetary policy announcement dates. Cumulative changes in sovereign yields during FOMC announcement dates contain critical information for explaining the persistent variations in the yields, predicting future yields and excess bond returns, and determining interest rate expectations and term premia. We build a dynamic term structure model with shifting endpoints to study the effects of U.S. monetary policy on world yield curves. Our findings highlight that U.S. monetary policy drives the secular declines in global interest rates by reducing expected interest rates.

We analyze the effects on Chinese firms of the "China Connect" equity market liberalization. Because China is a capital abundant country, unlike typical emerging markets in the literature, the benefits and costs of liberalization are logically different. Nonetheless, the liberalization brought benefits: lower funding costs, higher stock prices, and more investment for connected firms compared to unconnected firms, despite a common negative effect on all firms from capital outflows. These benefits come from a new channel: reducing domestic credit misallocation between private- and state-owned enterprises. We also document costs: connected firms became more sensitive to external shocks than unconnected firms.