# How Central Banks Use the Pass-Through of Policy Rates

Page: https://stenobird.com/podcast/monetary-policy-explained-with-fexingo-central-banks-money-supply-and-interest-rates-7872013/how-central-banks-use-the-pass-through-of-policy-rates
Text version: https://stenobird.com/podcast/monetary-policy-explained-with-fexingo-central-banks-money-supply-and-interest-rates-7872013/how-central-banks-use-the-pass-through-of-policy-rates.md
Podcast: [Monetary Policy Explained with Fexingo: Central Banks, Money Supply, and Interest Rates](https://stenobird.com/podcast/monetary-policy-explained-with-fexingo-central-banks-money-supply-and-interest-rates-7872013)
Published: 2026-07-13T20:00:30+00:00
Episode link: https://audio.fexingo.com/business/monetary-policy-explained/episode-0109.mp3
Audio file: https://audio.fexingo.com/business/monetary-policy-explained/episode-0109.mp3
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JSON: https://stenobird.com/v1/public/podcasts/monetary-policy-explained-with-fexingo-central-banks-money-supply-and-interest-rates-7872013/episodes/how-central-banks-use-the-pass-through-of-policy-rates
Duration seconds: 560

## Resource

Episode 109 of Monetary Policy Explained with Fexingo. Lucas and Luna drill into one of central banking's most maddening puzzles: the pass-through of policy rates to the real economy. They trace the journey from a rate hike announcement—say, 25 basis points from a major central bank in mid-2026—through bank funding costs, lending spreads, and ultimately to a small business owner's loan renewal. Luna highlights a 2024 study showing that in the euro area, only 40 percent of a rate change hits bank lending rates within one quarter, while in the U.S. the figure is closer to 70 percent. Lucas explains why the 'stickiness' differs: fixed-rate mortgages lengthen the transmission belt, floating-rate debt speeds it up, and banks' net interest margins buffer the shock. They also touch on how non-bank lenders and securitisation have changed the pass-through dynamics post-2023, and why the Bank of England now watches a 'pass-through gauge' in its quarterly Monetary Policy Report. A concrete, numbers-driven look at why monetary policy doesn't always work as fast as the textbooks say. #MonetaryPolicy #CentralBanks #PassThrough #InterestRates #FederalReserve #ECB #BankOfEngland #LendingRates #TransmissionMechanism #NetInterestMargin #MonetaryTransmission #FixedRateMortgages #FloatingRateDebt #NonBankLending #Securitization #Economics #FexingoBusiness #BusinessPodcast Keep every episode free: buymeacoffee.com/fexingo

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