From the course: Economics for Business Leaders
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Tracking Fed decisions
- Everyone talks about the Fed, economists, business media, professionals, and even average people care about what the U.S. Federal Reserve, otherwise known as the Fed, does. It's the central bank for the United States, and the reason this matters is because the Fed sets interest rates for the biggest economy in the world. If the Fed is raising interest rates, it means that the cost of money will get more expensive. For business leaders, this means that the cost to do business will rise, especially the cost to make new business investments. So if you're financing new investments like buying equipment, new structures or hardware, and you're doing that with loans, you're going to end up paying more in interest on those loans. Of course, if the Fed is lowering interest rates or expanding its balance sheet to depress interest rates, then the cost of money will fall. For business leaders, this is usually quite exciting. When…
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