kevinwarshtalk

The Federal Reserve's policy and the implications of lowering or raising interest rates, in a simplified scientific manner:
First: What does lowering interest rates mean?
When the Fed decides to lower interest rates (for example, by a certain percentage down to low levels), its goal is to **stimulate the economy. The impact is as follows:
Encouraging borrowing: Bank loans become "cheap," which encourages companies to take out loans for expansion, and individuals to borrow for purchasing homes and cars.