Global Spillover
How are international dynamics feeding back into US monetary conditions?
The Global Spillover lens tracks how international economic and financial dynamics interact with US monetary policy. The US dollar is the world's reserve currency, and Fed policy decisions propagate globally through dollar liquidity, capital flows, and trade channels. Those global effects then feed back into the US through import prices, financial conditions, and capital repatriation. This creates feedback loops that can amplify or dampen the intended effects of domestic monetary policy — particularly when other major central banks are on divergent paths.
Signals Produced
External Pressure
EXTERNAL_PRESSURE
Dollar Regime
DOLLAR_REGIME
Analysis Stages
Dollar Regime Assessment
What is driving the dollar? Rate differentials, risk appetite, or structural flows?
Policy Divergence Mapping
How are other major central banks positioned relative to the Fed?
Trade & Price Transmission
Is dollar strength/weakness feeding back into US inflation via import prices?
Capital Flow & Stability Analysis
Are global capital flows amplifying or dampening US financial conditions?
Required Sources
Must Have
Level, trend, rate-of-change
FRED
ECB, BOJ, PBOC, BOE rate decisions and forward guidance
Central bank websites
International risk references, dollar discussion
federalreserve.gov
Enhances Analysis
Trade balance, import/export volumes and prices
Census Bureau, BEA
Non-petroleum import prices, by origin
BLS.gov
Foreign purchases of US Treasuries, equities, corporate bonds
treasury.gov
Stress in key EM economies
FRED, financial news
Energy price channel from global supply/demand
FRED
More comprehensive than DXY (includes EM currencies)
FRED (TWEXBGSMTH)
Dollar funding stress proxy (outstanding draws)
federalreserve.gov
When This Lens Applies
Always applicable for US Monetary Policy theme. Global spillovers affect transmission and complicate the Fed's calculus.
Heightened Priority Triggers
- DXY moves >5% in a quarter
- Major central bank surprises (unexpected ECB/BOJ/PBOC move)
- EM crisis or contagion risk (spreads blow out, currency crises)
- Oil price moves >20% in a month
- US trade deficit widens sharply or tariff changes enacted