The Federal Reserve cannot directly control interest rates.

Question

Quizplus · Accepted Answer

The Federal Reserve can influence interest rates through its monetary policy, but it cannot directly control them. The Fed can adjust the federal funds rate, which is the rate at which banks lend money to each other overnight, and this can affect other short-term interest rates. However, longer-term interest rates are influenced by a variety of factors, including market expectations of inflation and economic growth, and are not directly controlled by the Fed.

The Federal Reserve Cannot Directly Control Interest Rates