Re: Simple Question: How does the Fed control interest rates?

From: Lantern (gchand4059_at_aol.com)
Date: 09/08/04 

Date: 08 Sep 2004 19:10:07 GMT

bc76 wrote:

>What I got from reading through that site is this:
>The fed controls the interest rate by controlling the money supply>

You are very astute. Excellent post. One small suggestion: instead of "money
supply" use the term "credit supply"..it may lead to more insight. For example:
"The fed controls the interest rate by controlling the credit supply." (The
currency supply is just a matter of inventory control which is a routine
matter.)

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