The fed controls interest rates

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The Federal Reserve, also known as "the Fed," controls interest rates and the money supply through monetary policy, which affects the economy. Open market operations, reserve requirement adjustments, and discount rate adjustments are the Fed's primary monetary policy instruments. The Federal Reserve (Fed) can change the federal funds rate, which in turn affects other interest rates and the money supply overall, by purchasing or disposing of government assets on the open market. Changes in the reserve requirement have an impact on the quantity of reserves banks must hold, while changes in the discount rate have an impact on the cost of borrowing for banks.

Reference no: EM133636596

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