Great news! The Fed just announced that the discount rate will rise by as much as 1% over the next three months. This will make it easier for Sean, the owner of a laser engraving business, to borrow money for that new piece of equipment he needs.

Question

Quizplus · Accepted Answer

If the Fed increases the discount rate, the rate that it charges member banks to borrow money, the banks will increase the rate that they charge their customers, deterring companies from borrowing money.

Great News! the Fed Just Announced That the Discount Rate