From the course: Economic Indicators

Unlock this course with a free trial

Join today to access over 22,600 courses taught by industry experts.

Fed decisions and the dot plot

Fed decisions and the dot plot

From the course: Economic Indicators

Start my 1-month free trial Buy for my team

Fed decisions and the dot plot

“

- If you're thinking about buying a car on Tuesday and interest rates go up on Wednesday, that's bad news if you need a car loan. Your monthly payment on that loan would be higher than it would have been just the day before. And you'll effectively be paying more for that same car. The same thing happens to companies. If they're planning to buy equipment and interest rates rise, their monthly payments will rise as well. And they might decide to postpone making important purchases that would otherwise grow their business and create more jobs. And you know what could make those interest rates go up on a single day? A decision by the US central bank, known as the Federal Reserve, to raise interest rates. The Fed makes decisions about its main policy interest rate known as the federal funds rate, and that impacts growth and inflation as well as equity markets, the dollar, and bond prices. The US Federal Reserve makes decisions eight times per year at Fed meetings. Through 2018, four of…

Contents