The Impact Of America Extraordinary Monetary Policies On Its Treasury Yield Curves

In 2007, the subprime mortgage crisis of America broke out and spread rapidly. In response to the most serious global financial crisis since the great depression, the FED cut its interest rates to near zero, leading to the failure of conventional monetary policies. In desperation, America issued a series of unconventional policies, which had a certain influence on its treasury yield curves. As the key media which plays a leading role connecting the policies and the macroeconomic in the process of conduction, the treasury yield curves are of great use to the analysis and decision of monetary policy. "Communist Party of China on Some Major Issues Concerning Comprehensively Deepening the Reform" Put forward in the Third Plenary Session of the Eighteenth Central Committee claimed to "improve the Treasury bonds yield curve which showing the relationship between market supply and demand", which gave the Treasury yield curves preeminent status. Therefore, studying the impact of America extraordinary monetary policies on its treasury yield curves can provide us lessons for better formulating policies and managing treasury bonds yield curves.Through the event study and the structure vector auto regression model (SVAR),this paper focuses on the influence of interest rate commitment and quantitative easing (QE) which is the most significant among the FED's extraordinary monetary policies on its yield curves. In addition, this paper has also focused on influence from the extraordinary monetary policy and Treasury yields on macroeconomic variables. On the one hand this can better reflect the transmission from monetary policy to the real economy, on the other hand this also validates the possibility of Treasury yield curves guiding the market as the benchmark interest, thus bring us a lot of inspiration for managing and applying the Treasury yield curve. The research finds that during the early period of financial crisis, the ability of the interest rate commitment to bring down the yield curves is particularly significant, but it is diminishing during the later stages. The last commitment is accidentally goes against the policy objectives; There is a lag in the Quantitative easing policy's influence to the yield curves, but their relationship is strong, and the policy can effectively curb output decline, but will make inflation slightly raise as well.