“…There is good evidence that monetary policy responses to asset prices are themselves asymmetric (Mayes & Viren, 2011 for the euro area; D'Agostino, Sala, & Surico, 2005 for the US) but little in the reverse direction, although Anderson, Bollerslev, Diebold, and Vega (2007) find that stock price responses to positive macroeconomic news, including that from interest rates, is positive in expansions and negative in contractions. 1 Simply put, it is normally thought, on the basis of previous evidence (Bernanke & Kuttner, 2005;Bredin, Hyde, Nitzsche, & O'Reilly, 2007a;Bredin, Hyde, Nitzsche, & O'Reilly, 2007b;Honda & Kuroki, 2006;Wongswan, 2005), that if there is a positive interest rate surprise this will encourage markets to fear that there is more adverse information available to the central bank than they had thought existed and hence the stock price response would be negative. However, in uncertain times such a surprise might lead markets to believe that policy will be more conducive to steady growth in the future, as the central bank appears more determined to maintain price stability than was previously thought.…”