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FEDERAL RESERVE

investing wednesday word of the week Aug 08, 2018

Definition
The Federal Reserve is the central bank of the U.S.  It conducts monetary policy (print more money, raise interest rates, etc.), regulates banks, makes sure the financial system remains stable, and provides financial services to U.S. banks, foreign governments and the public.
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Why It's Important
The Federal Reserve directly affects the interest rates you pay on your debt and the interest rates you earn on your savings.  This year they have raised the Fed Funds rate 2 times from 1.5% to 2%.  You may have noticed your interest rates changing, this is why!  Keeping an eye on "The Feds" decisions can indicate what your next move should be!  I bought my house when the Fed Funds rate was 0.75% in 2017.  Now, I am locked into a low interest rate compared to what's available today! 

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