Home › Topics › Monetary Transmission
FR · Transmission monétaire

Topic

Monetary Transmission

Between a central bank decision and its effect on credit, jobs and prices, more than a year often goes by. The channels, from bank lending and markets to the exchange rate and expectations, move at different speeds and strengths across countries and borrowers, which is why policy so often looks ineffective in real time. Every ECB decision since 1999, the effective fed funds rate since 1954 and a 70-year audit of Fed rate decisions follow the chain link by link.

50pieces
11in-depth analyses
23datasets
3quick reads

Where to start

Three reads, in order: the basics, the full mechanism, then what the data says.

01The basics Fed Funds and r-star: The Natural Rate as the FOMC’s Implicit Target and the Open Debate on Its Value r-star, the real natural rate of equilibrium, is the hidden central parameter of Fed monetary policy analysis. AnalysisRead → 02The full mechanism Monetary Policy Explained: Incentives, Limits, and Real Economic Impact Monetary policy shapes incentives and financial conditions but does not control the real economy. In-depth analysisRead → 03The evidence The Fed’s Track Record: A Quantitative Audit of 70 Years of Rate Decisions. What It Got Right, What It Got Wrong, and How Late It Always Is A monthly dataset of every Federal Reserve rate decision since 1954, cross-referenced against inflation, unemployment, and the Taylor Rule, quantifying the… StudyRead →

Research and data

Our in-depth research and the downloadable series on the subject.

Dataset 3.88%Latest value · October 2026 FEDFUNDS: Effective Federal Funds Rate Monthly Data from FRED (1954–2026) See the data → Dataset Euro Area Macro Data: ECB Datasets (Interest Rates, Inflation, Liquidity) Access 25 ECB macroeconomic datasets: interest rates, inflation (HICP), liquidity, credit, and real economy data. See the data → StudyThe Fed cut rates by 100 bps in late 2024. Mortgage rates rose anyway. StudyWhen the Fed Cut Into a Rising Stock Market: Every Episode Since 1984

All analyses, by angle

Grouped by sub-topic rather than by date. Filter to get straight to the point.

Central Banks and Monetary Policy8

The sub-pillar →

Monetary Transmission to Corporate Earnings7

The sub-pillar →

Inflation Explained3

The sub-pillar →

Other angles22

Quick reads

Comparisons and common misconceptions: the essentials in a few minutes.

ComparisonFed vs ECB: two mandates compared ComparisonQE vs rate cuts: two different easing tools ComparisonPolicy rates vs long-term rates: why they move differently

Related topics

The subjects that most often intersect with this topic in our analyses.

Inflation114 pieces Inflation is a regime rather than a monthly print, and its persistence matters more than its level. 9 in common → Housing & Real Estate42 pieces Housing’s real cycle is a credit cycle: transaction volumes react to rates long before prices do. 7 in common → Yield Curve47 pieces The slope of the yield curve is the market’s compressed forecast for growth, inflation and central bank policy. 5 in common → Global Liquidity34 pieces The Fed’s balance sheet is not market liquidity, even though the two are often treated as one. 4 in common → Credit Cycles24 pieces Credit turns before the economy does, and it rarely turns gently. 3 in common → Economic Cycles64 pieces A slowdown is not a recession, and quarterly headlines rarely reveal which phase the economy is in. 1 in common →
This topic also exists in French.Transmission monétaire, 28 pieces →