New Findings from Federal Reserve Bank of Boston in Economics Provides New Insights (The Mortgage Rate Channel of Monetary Policy Transmission: a Tale of Two Countries): Economics

2026 JAN 19 (NewsRx) -- By a News Reporter-Staff News Editor at Economics Daily Report -- Current study results on Economics have been published. According to news reporting out of Boston, Massachusetts, by NewsRx editors, research stated, “We study the mortgage rate channel of monetary policy transmission under two different mortgage regimes by analyzing the United States with primarily long-term fixed-rate mortgages (FRMs) and Spain with mainly annually resetting adjustable-rate mortgages (ARMs).”

Our news journalists obtained a quote from the research from the Federal Reserve Bank of Boston, “We find a robust transmission of mortgage rate changes to spending in both regimes, with marginal propensities to consume ranging between 0.58-0.67 in Spain and 0.27-0.52 in the United States. Under ARMs, transmission is stronger when rate changes are expected to persist, whereas under FRMs, the effect is larger when rate changes are expected to revert.”

According to the news editors, the research concluded: “We further document the important role of mortgage type in shaping the variation in transmission across mortgagors-while the mortgage rate effect is fairly homogeneous across diverse household characteristics under ARMs, it is more heterogeneous under FRMs and largest among potential refinancers.”

This research has been peer-reviewed.

For more information on this research see: The Mortgage Rate Channel of Monetary Policy Transmission: a Tale of Two Countries. Macroeconomic Dynamics, 2025;29. Macroeconomic Dynamics can be contacted at: Cambridge Univ Press, Edinburgh Bldg, Shaftesbury Rd, CB2 8RU Cambridge, England. (Cambridge University Press - www.cambridge.org; Macroeconomic Dynamics - http://journals.cambridge.org/action/displayJournal?jid=MDY)

Our news journalists report that additional information may be obtained by contacting Maria Jose Luengo-Prado, Federal Reserve Bank of Boston, Boston, MA 02210, United States. Additional authors for this research include Daniel Cooper and Vaishali Garga.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1017/s1365100525100667. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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