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The federal government affects interest rates more than any other factor. They set the Fed Funds rate and the Prime rate. Fannie Mae, Freddie Mac, FHA. VA, and USDA loans are all backed or guaranteed by the federal government. Most of these loans are securitized into mortgage-backed bonds. Thus the coupon rates and performance of these bonds directly affect rates.
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Who sets national interest rates in the US?
The Federal Reserve (The Fed)
Who creates the caps on government borrowing?
In the USA it is Congress. They have to pass legislation to authorize the government to borrow more money (raise the debt ceiling). Indirectly the Federal Reserve and the market also put a cap on it since the ability to borrow depends on the interest rate that must be paid on any bonds issued by the government. Higher interest rates set by the Fed cause the interest rates that must be paid on government bonds to have to be higher to actually sell. The market also determines what interest rate will be required to sell all the bonds - the less demand there is for the bonds, the higher the interest rate has to be in order to make them attractive enough to sell and the better the yields on other potential investments, the higher the interest rates have to be in order to be sufficiently competitive. The higher the interest rates, the more difficult it is to get approval to borrow.
If a government wanted to expand its capital resources it could?
lower interest rates to make borrowing money easier.
Why did Andrew Mellon work to reduce federal tax rates?
Andrew Mellon wanted to have tax rates reduced because lower taxes mean more money is available to expand businesses and add to employment. This was true in Mellon's time and is true today. The Government is an extremely inefficient spender of money. Compared to the private sector, government is less efficient because it does not need to worry about gains or losses.
Since 1913 the United States banking system interest rates and the amount of money in calculation have largely been controlled by?
The interest rates and the amount of money have been controlled by the economy rates since 1913.
Does the federal government influence interest rates?
The Federal Reserve, which is a part of the federal government, sets the Prime Rate, which is a rate which banks loan to each other and also the rate at which banks can borrow from the federal government. This prime rate, in turn, affects the interest rates which consumers pay for loans.
Why does the Federal Reserve cut interest rates?
banking economics us government
During Carter's administation how did the government try to fight inflation?
The Federal Reserve began raising interest rates
Which group on the Federal Reserve organization chart decides whether to raise or lower interest rates?
board of government
How do interest rates affect people's purchasing decisions?
High interest rates increase the cost on the ability to buy a house or a car.
A debate on whether the federal government should raise or lower interest rates is a debate about policy?
economic policy apex :)
When the federal reserve board lowers interest rates it most likely attempting to?
lower interest rates.
How interest rate affect the sa economy?
how interest rates affect the sa economy
How does bankruptcy affect interest rates on loans and credit cards?
It cause interest rates to rise.
Which types of loans have the lowest interest rates?
Federal
What is the significance of interest Rates for an economy?
the significance is that the government profit from specific interest rates in an economy
Identify the two policies that the federal government can follow in order to make the business cycle less disruptive?
federal government can lower interest rates and stimulate spending to make the business cycle less disruptive.
