---
title: Interest Rate Tightening and Financial Fragility
url: https://www.ml-quant.com/papers/ssrn/5084513/
site: ML-Quant (https://www.ml-quant.com)
updated: 2026-09-26
license: Summaries CC BY 4.0; links go to the original sources
index: https://www.ml-quant.com/llms.txt
identifier: SSRN 5084513
source_url: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5084513
featured: 2025-01-08
citations: unknown
topic: Macro-Finance & Rates
---


# Interest Rate Tightening and Financial Fragility

The study reveals that monetary tightening worsens financial stress after supply shocks, recommending less aggressive monetary policy tightening when financial fragility is present.

- Source: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5084513
- Identifier: SSRN 5084513
- Released: 2025-01-06
- First featured: Quant Letter No. 81 (2025-01-08): https://www.ml-quant.com/issues/2025-01-08/
- Citations (Semantic Scholar): not tracked
- Published in: not yet
- Topic: Macro-Finance & Rates

## Related

- [Empirical Analysis of the Impact of Legal Tender Digital Currency on Monetary Policy -Based on China's Data](https://www.ml-quant.com/papers/arxiv/2310.07326/): The paper suggests that China should develop a more effective monetary policy while promoting Central bank digital currencies, examining their impact on China's monetary policy and money supply multiplier.
- [Agree to Disagree: Measuring Hidden Dissents in FOMC Meetings](https://www.ml-quant.com/papers/arxiv/2308.10131/): A deep learning model study reveals that disagreement among FOMC members is primarily driven by current or forecasted macroeconomic data, and intensifies with more aggressive monetary policy action.
- [Inflation—Who Cares? Monetary Policy in Times of Low Attention](https://www.ml-quant.com/papers/arxiv/2105.05297/): Who Cares?: The decrease in public attention to inflation after the Great Inflation period in the U.S. complicates managing inflation expectations and can lead to inflation-attention traps, suggesting a need to increase the inflation target.
- [Post-COVID inflation and the monetary policy dilemma: an agent-based scenario analysis](https://www.ml-quant.com/papers/arxiv/2306.01284/): A new modelling approach using the Mark-0 Agent-Based Model explores the impact of regulatory policies on inflationary dynamics resulting from COVID-19-related shocks.
- [Monetary Transmission in Equity Markets](https://www.ml-quant.com/papers/ssrn/5078670/): The study suggests that contractionary monetary policy can cause equity outflows from mutual funds, which are then absorbed by banks charging a premium for market making.
- [Monetary Policy Impact](https://www.ml-quant.com/papers/ssrn/5060006/): The study reveals that companies with access to big data adjust their capital investment more in response to monetary policy shocks, especially if the data feedback loop is strong.