The Hidden Hand: How the Federal Reserve's Interest Rate Decisions Shape Small Business Lending and Economic Growth The Federal Reserve, often referred to as the central bank of the United States, has a profound impact on the economy through its interest rate decisions.
As part of its dual mandate to promote maximum employment and price stability, the Fed uses monetary policy tools to influence the overall level of economic activity.
At the heart of this policy is the setting of short term interest rates, which in turn affects the cost of borrowing for small businesses.