2min chapter

Planet Money cover image

Two Indicators: back to school

Planet Money

CHAPTER

The Fed Wants to Rake Interest Rates

The central bank is kind of like a bank for banks. So it sells treasury bonds so that banks have less cash. That means the banks charge other banks a higher amount of interest for that remaining cash. And the higher interest rate flows through the rest of the economy hitting car loans and business loans, everything else.

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