Interest Rates
How the Federal Reserve Sets Interest Rates
Explains how the Federal Reserve turns its target range for the federal funds rate into a real overnight rate using tools like IORB and repo facilities.
Monetary and Fiscal Policy
Monetary and fiscal policy are the two main tools governments use to steer the economy. Monetary policy, run by the Federal Reserve, works through interest rates and the money supply. Fiscal policy, set by Congress and the president, works through taxes and spending. The Treasury Department and presidential economic advisers also play roles.
People usually bring questions about how the two differ, how each responds to recessions and inflation, and who is in charge. They also ask how deficits and balanced budgets fit in, what supply-side and demand-side views argue, how government responds to financial crises, and how much government should intervene in markets.
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October 9last updated
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The Webby-recognized AI behind our articles »
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