The Federal Reserve for years has been the watch dog for inflation in the United States. The Federal Reserve adjusts the Federal Reserve Prime Rate according to economic conditions and other economical factors like the price of gold. Adjusting the Federal Reserve Prime rate controls the costs of many short term loans given to banks and credit unions, therefore this Federal Reserve Prime Rate has a lot to do with how much the banks and credit unions will charge you for your loan.

The Federal Reserve keeps track of all economic conditions in this great country of ours and around the world, and every six weeks it has a meeting and decides if the Federal Reserve Prime Rate will be raised, lowered or stay the same. In times of economic struggles and raising inflation, The Federal Reserve Rate will be lowered to get the credit flowing at a more reasonable rate as to help boost the economy. During the last economic recession, The Federal Reserve lowered the Federal Reserve Prime rate to right around one point to help boost the economy and get it back on track, helping the stock market regain billions of dollars that were lost due to high fuel prices during the Bush administration.

For over twenty five years the Federal Reserve has been the watchdog over the economy and thanks to their constant evaluation of economic conditions, this great country of ours has over come a lot of bad decisions that some former administrations and congress have implemented through the years. Our Federal debt is a good example of bad fiscal policies in the past and it makes the Federal Reserve's decisions even more important than ever.

The Federal Reserve Prime Rate has a lot do do with the prime lending rate that banks offer. Cd's and home loans as well as the amount of credit that is readily available is all monitored by the Federal Reserve and according to this economic information, the Federal Reserve will adjust its rate to keep inflation down and the economy going in a steady pace. If the economy slows down or gets overly productive, The Federal Reserve will adjust its rate to keep the economy in a stable economic condition.