(Revised September 12, 2025)

We show that nonbank financial intermediaries weaken the transmission of monetary policy to corporate investment, consumption, and house prices through a credit channel. For identification, we exploit exhaustive, proprietary loan-level data from the U.S. since the 1990s that identify whether the lender is a bank or nonbank, persistent variation in nonbank lending footprints across industries and locations, and monetary policy shocks. We find that tighter monetary policy shifts the supply of credit from banks to nonbanks. This attenuates the impact of monetary policy on corporate investment and house prices, while largely neutralizing its impact on durable goods consumption via a credit channel. Moreover, regulatory constraints play a crucial role in driving the differential response of nonbanks to monetary policy.