expression

monetary policy

central bank control of money supply and interest rates

In more detail

the actions a central bank takes to manage the supply of money and interest rates in an economy, in order to influence economic growth, inflation, and employment

Examples

The Federal Reserve uses monetary policy to control inflation by raising interest rates when prices rise too quickly.

How to use monetary policy

Monetary policy refers specifically to the tools and decisions of central banks (like the Federal Reserve or ECB) to control inflation and manage economic cycles by adjusting interest rates and money supply. It is contrasted with fiscal policy, which involves government spending and taxation. The term is used in both technical economic contexts and mainstream financial journalism.

Common phrases

monetary policy framework
monetary policy stance
tighten monetary policy
ease monetary policy
monetary policy decisions

Synonyms

central banking · money supply management · interest rate policy · quantitative easing

Opposites

fiscal policy

Word family

monetary (adjective) · money (noun)

A common mistake

Learners sometimes confuse monetary policy with fiscal policy; remember that monetary policy is about money supply and interest rates controlled by central banks, while fiscal policy involves government budgets and taxation.

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