May 14, 2021

It's Out Of The Fed's Hands.

It's Out Of The Fed's Hands.

In our society, we often give credit to so-called experts, for things which in reality are beyond their scope. A case in point is the Federal Reserve.
 
We assume that the Fed manages our interest rates, for instance. When the reality is that the Fed rea...


In our society, we often give credit to so-called experts, for things which in reality are beyond their scope. A case in point is the Federal Reserve.

 

We assume that the Fed manages our interest rates, for instance. When the reality is that the Fed really only controls short-term interest rates. They do this by setting the Fed Funds Rate, the preeminent short interest rate.