In this module, we learned about the impact of various elements on the financial management process. This includes actions taken by the Federal Reserve. One of the functions introduced in Chapter 15 includes
changing the "discount rate." The discount rate is the interest rate that it charges on loans to commercial
banks and other depository institutions. Changes in this rate can trigger a chain of events that affect other
short-term interest rates, foreign exchange rates, long-term interest rates, the amount of money and credit,
and, ultimately, a range of economic variables, including employment, output, and prices of goods and
services.
Visit the Meeting calendars, statements, and minutes section of the U. S. Federal Reserve Federal Open
Market Committee. If this page does not load, type "FOMC meetings" in the "Search" box located on the U. S.
Federal Reserve home page. Next, select a date from any year and click on the "Statement" link. Respond to
the following questions by writing 1-2 paragraphs for each item:
1. What action did the Committee take on this date?
2. What comments (if any) were made with respect to economic growth and/or core inflation?
3. Comment on any other concerns or issues indicated in the release.
4. What impact does this announcement have on the interest rate that could be charged to a company
who is trying to obtain a loan to expand its operations?