The FED'S MEETING WHY IT'S SO IMPORTANT
The FED'S FOMC plays a vital role in the Market because of its interest rate announcement that affects the decisions of the investors giving the Market a very high volatility.
As Fed Policy makers gather on Tuesday and Wednesday for the first time of this year 2024 their decisions will influence the rates you're offered on all kinds of credit, not to mention is used as a tool to temper inflation.
The Fed's committee has 12 members and meets 8 times a year to examine the U.S. Economy and vote on wether to alter the Fed Funds target rate or change the way open Market operations are conducted.
The Fed minutes were written and agreed after that, and the nuance may reflect other Fed members' concerns with the dovish flip-flop. The minutes matter because it is policy perceptions rather than economic trends that are changing at the moment.
It is the Federal Reserve's actions, as a central bank, to achieve three goals specified by Congress: maximum employment, stable prices, and moderate long-term interest rates in the United States.
The Fed has a major influence on your purchasing power
The Fed's interest rate decisions are bigger than just influencing the price you pay to borrow money and the amount you're paid to save. All of those factors have a prevalent influence on consumers' purchasing power.
The primary tools that the Fed uses are interest rate setting and open market operations (OMO). The Fed can also change the mandated reserves requirements for commercial banks or rescue failing banks as lender of last resort, among other less common tools.
What happens when the Fed increases reserves?
When the Fed raises the reserve requirement, that lowers the amount banks can lend. With a tighter money supply, banks can charge more to lend, which raises interest rates. Federal Reserve Board.
Why is the Fed keeping interest rates high?
