$ qubo learn macro/01

Central banks and interest rates

A central bank, such as the US Federal Reserve or the European Central Bank, sets a policy rate: the short-term interest rate at which banks borrow. That rate ripples into mortgages, corporate loans and bond yields.

Higher rates make cash and bonds pay more, which raises the bar for riskier assets. Lower rates have the opposite effect. That is why markets watch rate decisions closely, even for assets like bitcoin that pay no interest.

What moves prices is usually the surprise, not the decision itself. Markets price in expected decisions weeks ahead. A cut that everyone expected often moves little; an unexpected hold can move a lot.

Central banks also publish statements and projections. The wording about future decisions, sometimes called forward guidance, can matter more than the decision of the day.

// rule to remember

// your turn

In Markets › Central banks, find the date of the next Fed meeting and the current rate.

Educational content only. Not investment advice. Past data does not predict future results. Risk disclosure