How US monetary policy affects global economies
An accessible map of the channels through which US interest rates can influence currencies, borrowing conditions, capital flows and economic activity beyond the United States.
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Topic archive
Monetary policy
Explore how central-bank decisions, interest rates, inflation expectations and balance-sheet policies affect households, markets and economies. Historical articles retain their original setting and should be read alongside their publication dates.
Archive lens: distinguish historical forecasts from present economic conditions.
Articles in this archive
Current introductions and historical analysis covering monetary transmission, inflation, quantitative easing and central-bank strategy.
Why expectations of a US rate increase were rising
A historical chart-based discussion of inflation and employment indicators used to assess the likelihood of a policy-rate change in late 2016.
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Euro-area policy, debt and the limits of forecasting
This archive essay considers how analysts separate preferred policy outcomes from forecasts, using euro-area negotiations and debt questions as its historical setting.
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A policy-led recovery and pressure on emerging markets
A retrospective assessment of post-crisis policy support, gradual changes to asset purchases and the financial pressures then facing emerging economies.
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A historical look at the Federal Reserve's exit strategy
This article reviews a 2014 discussion of how policy accommodation might be withdrawn and why interest rates could remain comparatively low.
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What quantitative easing did not do
Three historical charts examine claims made about US asset purchases and clarify why identifying a programme's independent effects is difficult.
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Evaluating arguments about the risks of deflation
A retrospective examination of competing views on falling prices, including possible effects on debt, labour markets, spending and policy effectiveness.
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Japan's growth outlook in late 2014
This archive analysis reviews the uncertainty surrounding Japan's economy after a tax change, despite earlier fiscal and monetary support.
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Euro-area quantitative easing: an archive guide
A historical question-and-answer overview of the case for asset purchases, their intended transmission channels and the objections debated at the time.
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Reassessing Japan's economic programme in 2014
A period analysis of growing doubts about Japan's policy programme, its inflation objective and the durability of the expected recovery.
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How to read a policy decision
A rate announcement is only one part of the story. Use these four checks to understand its likely significance.
Identify the objective
Note the inflation, employment or stability mandate guiding the institution.
Check the instrument
Distinguish rate changes from asset purchases, lending facilities and communication.
Trace transmission
Consider borrowing costs, currencies, credit supply, asset prices and expectations.
Allow for lags
Policy effects are uncertain and can emerge at different speeds across an economy.
Monetary policy FAQ
What is monetary policy?
Monetary policy covers the tools and communications a central bank uses to pursue objectives such as price stability, employment or financial stability, depending on its mandate.
How do interest-rate changes reach the economy?
They can influence loan and deposit rates, exchange rates, spending, investment, asset values and expectations. The strength and timing of each channel vary.
What is quantitative easing?
Quantitative easing generally refers to central-bank purchases of financial assets intended to influence longer-term yields, liquidity and broader financial conditions.
Why can US policy affect other countries?
The US dollar's international role and the scale of US financial markets mean changes in US conditions can affect currencies, capital flows and financing costs elsewhere.
Are archive forecasts still current?
No. They document the information and arguments available at publication. Readers should not treat a historical forecast as a statement about conditions in 2026.
Does Economic Monitor provide financial advice?
No. The material is educational and editorial. It is not personalised investment, tax or legal advice.