Definition
What a central bank does with interest rates and its balance sheet to steer the economy.
The story
It's the Fed's half of managing the economy. It can change the price of money (rates) and how much money is around (the balance sheet). It can't build roads or change taxes; that's Congress.
Why markets watch it
It's the main driver of interest rates.
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We explain why it moves markets. What you do with it is your call. Commentary and education only. Not financial advice. All terms