Why does the FED need to increase interest rates?

Answer 1

To nip inflation in the bud

Answer 2

I agree with Stormy, and the fact that jobs are less with people having even less to live on makes no difference to the FED. If it did, there would be easier programs to accommodate more consumers who really would prefer a house over an apartment, and programs to help those who need to repair the homes that they are trying to hold on too because of the cost of new ones.

Answer 3

It attempts to slow the rate of inflation by increasing interest rates.

Answer 4

interest rates promote consumer spending when they are low and increase the gross national product and investment market activity. this is just one economic effect, but in comparison, when interest rates are high, consumer spending declines. i enjoy the latest program for the book Rich Dad Poor Dad, which is about investing; however, you need to search economics or economy for a lengthy report on the present economy and rising interest rates. It should be a common topic on TV business programs also.

Answer 5

by increasing the interest rates, fed is trying to reduce the inflation on consumer goods - notably gasoline and food prices.

Answer 6

If you think for 1 minute that the Federal Government has your best interest in mind, You need to see a doctor. They only do things that put money in their pockets and make them look politically good. They could care less about the very people who elected them into office.

Answer 7

fed increases intrest rates in order to put more money in the peoples pockets in order to adjust for inflation and aid economic growth