The role of monetary policy in shaping electoral outcomes has gained renewed attention amid rising inflation, interest rate hikes, and recent geopolitical instability. Despite its significance, this relationship remains insufficiently explored, leaving important questions unanswered about whether and how monetary policy decisions influence voter intentions and support for political parties. This paper investigates the potential link between unexpected changes in interest rates and voter support for incumbent parties, focusing on the broader implications for economic voting and political accountability.

To address this question, we leverage a high-frequency daily dataset of monetary surprises (Altavilla et al., 2019), which captures unexpected responses in EONIA swap rates immediately following European Central Bank (ECB) announcements. Additionally, we use a long and uninterrupted series of public opinion data from the Spanish CIS barometer, spanning from 1986 to 2023. By combining these datasets, with the overlap starting in 1999, we analyze how unanticipated interest rate changes influence voters’ perceptions of the economic situation and their voting intentions.

Our findings contribute to the literature at the intersection of empirical, state-of-the-art macroeconomics and political science by providing robust evidence on the political consequences of monetary policy. Leveraging high-frequency monetary surprises as an instrumental variable enhances the identification of causal effects, demonstrating that these unexpected shifts significantly influence public perceptions of economic performance and voter intentions toward incumbent parties. This research is particularly timely given recent inflationary pressures and the heightened political salience of central bank decisions, offering novel insights into the sociopolitical ramifications of monetary policy.