In the U.S., interest rates are determined by the Federal Open Market Committee (FOMC), which consists of seven governors of the Federal Reserve Board and five Federal Reserve Bank presidents.
The FOMC meets eight times a year to determine the near-term direction of monetary policy and interest rates.
How does Federal Reserve control interest rates?
The Federal Reserve raises or lowers interest rates through its regularly scheduled Federal Open Market Committee. The FOMC sets a target for the fed funds rate after reviewing current economic data. The fed funds rate is the interest rate banks charge each other for overnight loans. Those loans are called fed funds.
What is the current federal interest rate?
On January 30, 2019 the Federal Reserve said that it would keep its target range for its benchmark interest rate at 2.25% to 2.5%, the range it had announced at its meeting on December 19, 2018. In September, the Fed raised interest rates by 25 basis points to current levels, the highest recorded since April 2008.
What does the Federal Reserve control?
The responsibilities of the Federal Reserve include influencing the supply of money and credit; regulating and supervising financial institutions; serving as a banking and fiscal agent for the United States government; and supplying payments services to the public through depository institutions like banks, credit