Latest / Monetary Policy Explained with Fexingo: Central Banks, Money Supply, and Interest Rates
How Central Banks Use the Credit Impulse to Predict Growth
Episode 120 of Monetary Policy Explained with Fexingo dives into the credit impulse – the change in new credit creation relative to GDP. Lucas and Luna unpack why the Bundesbank and the Bank of Japan are tracking this leading indicator, using a concrete example from Germany: a sharp drop in the credit impulse in late 2025 preceded a 0.3% GDP contraction in Q1 2026. They explain how the credit impulse differs from total debt levels, why it tends to lead economic turning points by two to four quarters, and how central banks factor it into policy decisions. The hosts also touch on the Bank of…
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