How the Federal Reserve's Interest Rate Decisions Affect Investors The Federal Reserve's (Fed) interest rate decisions have a profound impact on the economy and financial markets.
As the central bank responsible for maintaining maximum employment and price stability, its actions influence the availability and cost of credit, which in turn affect economic growth, inflation, and asset prices.
Understanding the Fed's Role in Interest Rates The Fed's primary objectives are to promote maximum employment and stable prices. To achieve these goals, it uses monetary policy tools, including setting interest rates.