Intro to Business › Section O · Money and financial institutions › Topic O.2
The Federal Reserve System
When the Federal Reserve moves interest rates, the cost of every business loan, mortgage and credit line moves with them. This topic explains how the Fed is organised, what it is trying to achieve, and the tools it uses, with the settings in force as of 2026.
In this topic
- Why the Fed matters to business
- Origins and independence
- How the Fed is organised
- The Fed's goals
- Setting the policy rate today
- The classic tools
- Worked example: a rate rise reaches a firm
- Rules on credit and lending in a crisis
- Worked example: buying shares on margin
- Currency and payments
- Common mistakes to avoid
- Key takeaways
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