The Federal Reserve is responsible for setting the interest rates for the US economy. Low interest rates are an important tool for the Fed to stimulate economic growth and prevent deflation. Low interest rates are beneficial for borrowers, as they can borrow money more cheaply and businesses can expand and hire more workers. Low interest rates also encourage people to save, as they are likely to get higher returns on their investments. Low interest rates generally help the economy by making it easier for businesses to borrow money and invest in growth. Low interest rates can also have a negative impact, however, as they can lead to asset bubbles and inflation. It is important for the Fed to strike a balance between stimulating the economy and avoiding the potential harms of low interest rates.
April 3, 2023
Why does the Federal Reserve keep interest rates low?
