Key Concepts: The Federal Reserve System, Implementing Monetary Policy, Monetary Policy and Equilibrium Income

Federal Reserve—Selected Interest Rates

Click on "Current Release" to view "Selected Interest Rates" in PDF format.

• Explain how FOMC may buy or sell bonds to achieve a "short-run" operating target Federal Funds rate.
• Describe how the Federal Funds rate may affect the interest rates of U.S. government securities such as bonds.
• Review the current 30-year mortgage interest rate information at Interest.com and note that the 30-year mortgage rate is benchmarked to the 30-year U.S. government security (bond) rate. Explain how controlling the Federal Funds rate can affect the overall demand for money in the economy (Hint: consider the determinants of money demand).