Overall economic policy and approaches must be taken into account and used wisely and in a relevant, sustainable way depending on the specific strengths and weaknesses of the overall economy at any point. Generally, historically, rates rise when there is a fear of inflation and drop when there appears to be a need to reduce inflation.
2. Federal Reserve Bank actions: When inflation appears to be a real risk, the Federal Reserve Bank frequently tightens the money supply, while other times, they want to encourage increasing the overall money supply, etc. Some people consider these actions to be good ones, while others worry that they are occasionally politically motivated manipulation.
3. Inflation/ Recession concerns/ balance: The Federal Rates frequently determine items, such as: rates paid by banks to depositors (interest); rates banks pay to borrow; costs to corporations/ companies; etc. In addition, they trickle - down, to, other elements of the economy, etc. One example is, when rates rise, other parts of the economy follow suit.
4. Future prediction/confidence: Although there isn't always a direct link, policy is frequently determined by fear or concern for the future.
5. Job market: If inflation is under control and the job market is generally solid, it frequently influences policy in this economic and financial area. It is frequently assessed if any action will have an immediate or long-term impact.
Will you make a commitment to becoming a more informed citizen and consumer? The more familiar we are with economic facts, the better we may predict the best course of action."""