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You must have not been paying attention to financial news over last decade. > When the Federal Open Market Committee wishes to reduce interest rates they will
by chewz 6y ago
You must have not been paying attention to financial news over last decade.
> When the Federal Open Market Committee wishes to reduce interest rates they will increase the supply of money by buying government securities. When additional supply is added and everything else remains constant, the price of borrowed funds – the federal funds rate – falls.
https://en.wikipedia.org/wiki/Federal_funds_rate#Explanation_of_federal_funds_rate_decisions https://en.wikipedia.org/wiki/Federal_funds_rate#Explanation...
- marcosdumay 6y agoYes. "When everything else remains constant" here means people choosing to take that extra money and immediately lending it to the government. It's not the government that makes this choice.