Analysis of the Interconnectedness of Interest Rate Markets under the Background of Globalization: A Case Study of the Short-Term Treasury Bond Markets of China and the United States

Abstract

In today’s globalized world, the interconnectedness of Cross-Border financial markets has grown significantly, with shifts in short-term interest rates exerting a notably substantial effect on the economies of many countries. As leading global economies, the volatility in the short-term interest rate markets of China and the U.S. impacts not just their own economic landscapes but also significantly influences the steadiness of the worldwide economic framework. While these studies lay a theoretical groundwork, a comprehensive analysis of the interconnectedness between China and the U.S. in the short-term interest rate markets remains elusive. Particularly, there is a dearth of thorough research into how the short-term Treasury bond markets of both countries interact under the umbrella of globalization. This study aims to concentrate on the interconnectedness within the short-term Treasury bond markets of China and the U.S., investigating how these markets interact under diverse economic climates. By conducting comparative analyses, the goal is to uncover the mechanisms of mutual influence between the two markets within the context of globalization. The objective is to offer a fresh perspective on the interconnectedness of the short-term Treasury bond markets of China and the U.S., thereby furnishing theoretical backing for future academic inquiry and the development of policy.