Banks give out money all the time – for a fee. When we borrow and then pay back with interest, it’s how banks make money. The cost of borrowing – interest rates – makes a big difference in which credit card you choose or whether you get one at all. If your bank wants to make it more expensive to borrow, it’s not as simple as just slapping on a new rate, as a grocer would with milk. That’s something controlled higher up, by the Federal Reserve, America’s central bank. Why does the Fed care about interest rates? In 1977, Congress gave the Fed two main tasks: keep the prices of things Americans buy stable, and create ... (full story)