Exam 1 review · Lesson 11 of 45
The Fed & What Moves Interest Rates
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Exam 1 review · Lesson 11 of 45 · 12 min
The Fed & What Moves Interest Rates
How the Fed's three tools, the business cycle, deficits, the trade balance and global risks push interest rates up or down, and why short and long rates can move differently.
Inside this lesson
- Why this matters
- The core idea
- The formula
- Worked example 1: a change in expected inflation moves a yield
- Worked example 2: a "most FALSE" question on what moves rates
- Your turn
- Calculator steps
- Common mistakes
- Quick check
- Key takeaways
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