See perhaps: * https://en.wikipedia.org/wiki/Monetary_transmission_mechanism https://en.wikipedia.org/wiki/Monetary_transmission_mechanis... Cullen Roche is a

See perhaps: * https://en.wikipedia.org/wiki/Monetary_transmission_mechanism https://en.wikipedia.org/wiki/Monetary_transmission_mechanis... Cullen Roche is always worth checking out: > Monetary Policy is the various set of policies initiated by the Central Bank to try to stimulate or slow the economy. This typically includes changing interest rates, altering the size of the balance sheet and communicating via “open mouth policy”. The transmission mechanism of these policies are controversial and the goal of this post is to add some clarity to the ways in which this works. * https://www.pragcap.com/monetary-policy-transmission-mechanism/ https://www.pragcap.com/monetary-policy-transmission-mechani... It should also be asked "working at doing what, exactly?". If you have an hot economy because of a lot of demand because of easy credit creation, then clamping down on credit creation can help in slowing things down: * https://en.wikipedia.org/wiki/Demand-pull_inflation https://en.wikipedia.org/wiki/Demand-pull_inflation If however you have (e.g.) a geopolitical event that causes (say) a spike in food and energy prices, then that's not really an issue that is largely controlled through credit creation: * https://en.wikipedia.org/wiki/Cost-push_inflation https://en.wikipedia.org/wiki/Cost-push_inflation Then there are other scenarios, like sudden changes in consumer behaviours that cause problems: * https://ritholtz.com/2022/06/goods-versus-services/ https://ritholtz.com/2022/06/goods-versus-services/ * https://www.detroitnews.com/story/business/2021/04/19/global-ports-clogged-unprecedented-shipping-volume/7289033002/ https://www.detroitnews.com/story/business/2021/04/19/global... * https://www.cnbc.com/2022/02/18/whats-behind-the-congestion-at-us-ports.html https://www.cnbc.com/2022/02/18/whats-behind-the-congestion-... * https://www.frbsf.org/research-and-insights/publications/economic-letter/2022/06/how-much-do-supply-and-demand-drive-inflation/ https://www.frbsf.org/research-and-insights/publications/eco... Some of these things monetary policy can deal with better than others, but a lot of folks expect monetary to do something (anything!), and if it doesn't make an attempt than there's all sort of other drama.