The Phase-Dependent Effects of Monetary Policy: Plateau vs Cycle

Rose Portier ()
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Rose Portier: Centre d'Economie de la Sorbonne, Université Paris 1 Panthéon-Sorbonne et Banque de France, https://sites.google.com/view/rose-portier/home

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

Abstract: Monetary policy dynamics can be split into two phases: cycle and plateau. This paper examines how these two phases of the policy rate shape monetary policy transmission to interest rates. We provide new evidence that monetary policy surprises have stronger effects during plateau phases than during tightening or easing cycles. This pattern holds in the United States, euro area and United Kingdom. It is not driven by unconventional policies, hysteresis from past cycles, or anticipation of future cycles. It operates through revisions to medium-term policy expectations and holds beyond the lower monetary policy uncertainty and background noise characterizing plateau phases

Keywords: Monetary policy cycles; Long-term interest rates; Monetary policy surprises; State-dependence; Policy signaling (search for similar items in EconPapers)
JEL-codes: E43 E52 E58 G12 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2026-06
New Economics Papers: this item is included in nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:mse:cesdoc:26008

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