The financial system is the first link in the monetary policy transmission chain. So far in this monetary tightening episode, how have financial conditions evolved? Has their evolution differed materially from past tightening episodes? If so, how and why? How has real activity responded to date? This Bulletin explores these questions, and thereby serves as an input to calibrate the next steps for monetary policy. First, it documents the recent evolution of financial conditions and compares their patterns with those observed in past tightening episodes. It then turns to the response of real activity and the policy implications. […]