May 14, 2021

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...

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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.