Rate Transmission
How are rate changes propagating to the real economy?
The Rate Transmission lens tracks how Federal Reserve policy rate changes translate into real-world economic outcomes. Monetary policy works through multiple channels — credit, asset prices, exchange rates — and each transmits at different speeds with different lags. This lens identifies which channels are active, which are impaired, and whether the current cycle is transmitting faster or slower than historical norms.
Signals Produced
Transmission Speed
TRANSMISSION_SPEED
Dominant Channel
CHANNEL_DOMINANCE
Analysis Stages
Credit Channel Mapping
Are bank lending rates tracking policy changes? What are the lags?
Asset Price Channel
How are equity, housing, and bond markets responding to rate expectations?
Exchange Rate Channel
Is dollar strength/weakness amplifying or dampening transmission?
Lag Estimation
Is this cycle transmitting faster or slower than historical norms (12-18 month typical lag)?
Required Sources
Must Have
Policy rate decisions, forward guidance language
federalreserve.gov
30Y fixed rate, spread to 10Y Treasury
FRED (MORTGAGE30US)
2Y, 10Y, 2s10s spread, term premium
FRED
Enhances Analysis
Bank lending standards for C&I, CRE, consumer
federalreserve.gov
IG/HY new issue volume, spread trends
FRED, SIFMA
Consumer credit cost pass-through
FRED
Existing/new home sales, starts, permits
Census, NAR
Exchange rate channel activity
FRED
When This Lens Applies
Always applicable for US Monetary Policy theme. This is the primary lens for any FOMC-anchored analysis.
Heightened Priority Triggers
- Fed changes rates after extended pause
- Mortgage-Treasury spread widens >100bp above normal
- Credit conditions diverge from policy rate direction