This study shows that, in the United States, the e§ects of monetary policy on credit and housing markets have become considerably stronger relative to the impact on GDP since the mid-1980s, while the e§ects on ináation have become weaker. Macroeconomic stabilization through monetary policy may therefore have become associated with greater áuctuations in credit and housing markets, whereas stabilizing credit and house prices may have become less costly in terms of macroeconomic volatility. These changes in the aggregate impact of monetary policy can be explained by several important changes in the monetary transmission mechanism and in the composition of macroeconomic and credit aggregates. In particular, the stronger impact of monetary policy on credit is driven by a much higher responsiveness of mortgage credit and a larger share of mortgages in total credit since the 1980s.