In other articles, I have explained exactly what the Fed is, and how it came to being.
I have also explained exactly how it affects mortgage interest rates on NJ mortgages, and NJ home values.
People, of course, generally want low interest rates when buying NJ homes for sale.
Needless to say, the Fed controls a LOT, and interest rates are of vital importance.
So what does the Fed actually do, on a day to day basis, and year to year? The Fed is THE most powerful central bank in the US, and the entire world.
So we know that it regulates the entire US economy, but let's break it down a little further.
The Fed regulates financial institutions, acts as the U.
S.
government's bank, and THE bank of the entire world.
Hence, it can boom or bust the entire us and New Jersey economy, with he stroke of a pen to paper.
The Fed manages the nations money.
The Fed is actually made up of two separate boards, the Board of Governors, which regulates the monetary policies, and the 12 Regional Reserve banks, which carries out these policies and oversees many subordinate financial institutions.
It's tow PRIMARY functions are to maintain stable prices of things, and maintain maximum employment and production output.
These are the keystones of our economy in the US, and locally in New Jersey here.
The way the Fed achieves these goals, is by raising or lowering the short-term and long-term interest rates.
That affects the rise and fall of NJ mortgage rates.
More emphasis on the short term interest rates, however.
By doing this, the Fed indirectly influences demand for goods and services in NJ and the rest of the US.
This, in turn, influences the economy as a whole.
It is not hard to understand the concept of how this all works: if interest rates are lowered, borrowing money to make purchases becomes less expensive, and people are more apt to make purchases.
And the spending of money, spurs growth in the US and on the local front, New Jersey.
BUT, if the case is that there is too much money in the economy, people tend to spend more and demand increases more rapidly than supplies of goods can keep up.
Prices rise to quickly and all of a sudden, supply is short and here comes inflation! And on the contrary, if there is too little money out there, people spend less and economic growth slows way down or completely stops, in some extreme cases.
I have also explained exactly how it affects mortgage interest rates on NJ mortgages, and NJ home values.
People, of course, generally want low interest rates when buying NJ homes for sale.
Needless to say, the Fed controls a LOT, and interest rates are of vital importance.
So what does the Fed actually do, on a day to day basis, and year to year? The Fed is THE most powerful central bank in the US, and the entire world.
So we know that it regulates the entire US economy, but let's break it down a little further.
The Fed regulates financial institutions, acts as the U.
S.
government's bank, and THE bank of the entire world.
Hence, it can boom or bust the entire us and New Jersey economy, with he stroke of a pen to paper.
The Fed manages the nations money.
The Fed is actually made up of two separate boards, the Board of Governors, which regulates the monetary policies, and the 12 Regional Reserve banks, which carries out these policies and oversees many subordinate financial institutions.
It's tow PRIMARY functions are to maintain stable prices of things, and maintain maximum employment and production output.
These are the keystones of our economy in the US, and locally in New Jersey here.
The way the Fed achieves these goals, is by raising or lowering the short-term and long-term interest rates.
That affects the rise and fall of NJ mortgage rates.
More emphasis on the short term interest rates, however.
By doing this, the Fed indirectly influences demand for goods and services in NJ and the rest of the US.
This, in turn, influences the economy as a whole.
It is not hard to understand the concept of how this all works: if interest rates are lowered, borrowing money to make purchases becomes less expensive, and people are more apt to make purchases.
And the spending of money, spurs growth in the US and on the local front, New Jersey.
BUT, if the case is that there is too much money in the economy, people tend to spend more and demand increases more rapidly than supplies of goods can keep up.
Prices rise to quickly and all of a sudden, supply is short and here comes inflation! And on the contrary, if there is too little money out there, people spend less and economic growth slows way down or completely stops, in some extreme cases.