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To: GOPJ

Feds don’t control interest rates.


12 posted on 12/14/2023 1:06:08 PM PST by TexasGator
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To: TexasGator

It is true that the Feds do not control interest rates.

However they do control the rates at which they lend to banks at the Fed window—as well as the extent of their willingness to lend funds to banks at all.

That in turn does affect the amount of risk banks can legally take to remain in regulatory compliance.

This is turn affects interest rates the banks charge their customers.

That is not the only interest rate out there of course.

Bottom line—the Fed can have a significant effect on interest rates—but as you say they do not “control” them.


13 posted on 12/14/2023 1:14:01 PM PST by cgbg ("Our democracy" = Obey or get canceled.)
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