Glossary · from the DESK dictionary
Monetary Policy
A central bank's management of interest rates and the money supply to achieve economic policy goals.
In plain words
The tools a central bank uses to influence inflation and economic growth.
In more detail
Key tools include the policy rate, quantitative easing/tightening, and forward guidance (communicating future policy). Monetary policy is considered one of the most important influences on virtually every asset class.
Example
Tight monetary policy (high rates) has historically tended to hurt growth stocks more than value stocks.
What it means for traders
A central framework for macro-oriented investing and trading.
Common pitfalls
Monetary policy acts with a lag — missteps are hard to recognize immediately.
Related terms
Fiscal Dominance · Fiscal Policy · Inflation · Policy Rate · Monetary Base · Monetary Easing · Monetary Policy Committee (MPC) · Monetary Transmission Mechanism · Central Bank
From the DESK dictionary. For information only, not investment advice.
This is one page of many.
- The DESK dictionary explains more than 9,400 market terms like this one, in English and German – searchable, sorted by topic and difficulty, with favourites.
- Plus the Macro Terminal with more than 900 indicators per country, company pages and a weekly report.
Also open to read: Glossary A–Z · Free calculators · Weekly report archive
DESK is a research tool and not investment advice. Page generated: 2026-10-12.