How does the federal reserve influence the changing of federal fund rates?

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How does the federal reserve influence the changing of federal fund rates?

2007-10-05 18:22:32 · 3 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States

3 answers

The Federal Reserve can set the interest rate that it charges member banks for the use of funds. The Federal Reserve can also increase or decrease the amount of funds in circulation in the economy (sometimes referred to as M-1).

2007-10-06 21:48:57 · answer #1 · answered by mattapan26 7 · 0⤊ 0⤋

The Fed doesn't "influence" the rate, they actually set it.

2007-10-06 07:14:31 · answer #2 · answered by Bostonian In MO 7 · 2⤊ 0⤋

Ask Ben Bernake. He knows that answer.

2007-10-06 01:12:54 · answer #3 · answered by Steve 6 · 0⤊ 0⤋