> Exchange rates are set by the market, but the interest rate is a decision made in a boardroom Only partly. One of the points the author makes is that centra

> Exchange rates are set by the market, but the interest rate is a decision made in a boardroom Only partly. One of the points the author makes is that central bank interest rates, while conceptually set arbitrarily "in a boardroom", are constrained to a narrow range by market realities, and attempts by "the boardroom" to set interest rates outside this range result in various forms of economic dysfunction that central banks try hard to avoid. > Returns on such investments have been high in recent years. CB interest rates translate relatively directly into the cost of borrowing, and the cost of repaying old debts. Interest rates do not determine the return on savings. Yes and no. We've been in a bull market for so long that people such as yourself have begun to think of investments as simply savings with high yield. You're neglecting to account for risk. CB interest rates set the risk-free savings rate. Of course you can get higher returns by taking more risk, and for most people, taking a bit of risk is the right thing to do.