The Fed adjusts the interest Rates - Why the Fed announced policy in interest-rate terms

4 important questions on The Fed adjusts the interest Rates - Why the Fed announced policy in interest-rate terms

Why does the Fed announce policy in interest-rate terms?

Clarity for the public makes understanding monetary policy easier. Interest rates impact borrowing, investment, and consumption.

Why is clarity important when the Fed announces policy?

Public understanding is enhanced when policies are communicated in interest-rate terms.

How does monetary policy influence the economy?

The economy is influenced through channels like interest rates affecting borrowing costs.
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Why are interest rates easier to monitor compared to money supply?

Interest rates can be observed daily, whereas money measures are less reliable.

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