The FOMC controls the real interest rate:

Question

Quizplus · Accepted Answer

The FOMC controls the real interest rate by adjusting the federal funds rate, which affects the nominal interest rate. The real interest rate is the nominal interest rate minus the rate of inflation, so if inflation doesn't change quickly, the FOMC can more effectively control the real interest rate. If inflation changes quickly, it may be more difficult for the FOMC to keep pace with changes in the rate of inflation and maintain control over the real interest rate. The statement about the FOMC only controlling the real interest rate on an annual basis is not accurate, as changes to the federal funds rate can occur more frequently than once per year.

The FOMC Controls the Real Interest Rate