Track C · MacroNode C5
Rates as the price of time
Layer 1 · Pocket
~ 30s readThe thirty-second answer
What is this?
A central bank changes one number — the policy rate. Treasuries, mortgages, credit, equities, the dollar, jobs, prices all respond, but at different speeds. The "long and variable lags" are the whole story.
Why should I care?
When a Fed cut hits the news, three things have already happened and most haven't. Reading the timing — what's priced in, what's in the pipe, what hasn't arrived — is the whole skill of reading monetary policy in real time.
Channels · roughly when they respond
- Short rates · 10-yr · mortgages
- 0–2 mo
- Credit spreads · USD
- 3–4 mo
- Equities
- ~ 6 mo
- Unemployment
- ~ 14 mo
- Inflation
- ~ 18 mo