Federal Funds Rate | Eye On Housing

Top Posts – How Quickly Do Prices Respond to Monetary Policy?

Eric LynchDecember 31, 2024April 16, 2025012 mins

With the end of 2024 approaching, NAHB’s Eye on Housing is reviewing the posts that attracted the most readers over the last year. In April, Eric Lynch examined various macroeconomic and housing finance components and their responsiveness to changes in the federal funds rate. As economist Milton Friedman once quipped, monetary policy has a history…

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How Quickly Do Prices Respond to Monetary Policy?

Eric LynchApril 17, 2024April 16, 2025012 mins

As economist Milton Friedman once quipped, monetary policy has a history of operating with “long and variable lags.”[1] What Friedman was expressing is that it takes some time for the true effects of monetary policy, like the changing of the federal funds rate, to permeate completely through the larger economy. While some industries, like housing,…