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Running head: IMPACT OF FEDS DECISIONS ON THE ECONOMY
THE IMPACT OF FEDS DECISIONS ON THE ECONOMY
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IMPACT OF FEDS DECISIONS ON THE ECONOMY
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The FEDS have consistently decreased interest rates since September 2019 by making the
benchmark lower by 0.25%. Though during this coronavirus pandemic, FEDS have cut interest
rates close to zero standards dictating a decrease in the cost of borrowing, which in return alerts
investors to ask for more loans so that they can finance their business. Such moves are meant to
increase production. The step of lowering interest rates is more beneficial to profit-making
companies as they can get capital through cheaper sponsorship and make establish their
investments at low operational costs (Bernanke, 2017). The FEDS' on interest rates has
significantly seen auto companies benefit. Investors are also likely to be tempted to invest in risk
assets during the coronavirus pandemic as government bonds, and accounts pertained to savings
are seen to be less attractive.
Lowering interest rates means low-interest rates on auto loans. Thus, it will encourage
businesses to deal with car purchases to take place since auto loans have a longer grace paying
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