Why the Fed Raises or Lowers Interest Rates The Fed uses interest rates as a lever to grow the economy or put the brakes on it. If a borrower wants to spend more than his actual cash on hand, he’ll need to find someone to lend him additional funds.
Let’s use the mortgage market for our example. This occurs because other countries use their own currency, or foreign currencies to buy the successful currency. As banks indeed are paying more for the money they lend to borrowers, they have to charge them more, causing interest rates to rise. Many goods such as oil are traded in dollars. Banks often increase savings yields in a strong market, giving you a more lucrative place to stash your money.Even while banks can lower or raise APYs, a high-yield savings account is still a good place to put your money.The national average APY on regular savings accounts is just If you're looking to save your money, you may want to consider some of CNBC Select's With one of these five high-yield savings accounts, you can rest assured that your money is growing over time, even as your interest rate continues to flux.CNBC Select may receive an affiliate commission when you click on the links for products from our partners. The way governments spend their money and finance their endeavors is called Another major factor affecting why interest rates change is The trouble is, no one is quite sure how much money is necessary in an economy at any time and how it’s actually used once it’s available. They may fluctuate (up or down) as the Fed rate changes.