Monetary transmission mechanism
The route by which a policy rate decision reaches prices and demand: through money-market rates, the yield curve, loans and deposits.
How to read the number
It explains why the debt market reacts before the economy does: the first link of the chain is precisely rates and the curve.
When the metric lies
Every link works with a delay and the delays accumulate. The absence of a reaction in prices soon after a rate decision says nothing about whether the decision worked.
Also known as: transmission of monetary policy