What kind of ripple effect will the Federal Reserve's interest rate cuts have on things like borrowing, spending, saving, and investing? 

The Federal Reserve announced Wednesday that they will reduce the federal funds rate by 50 basis points (or 0.50%). This is an impactful move as it follows an increase of 500 basis points (or 5.0%) over the last several years, resulting in a cooling off of the U.S. economy as the Federal Reserve continues its efforts to reach their target of 2.0% inflation.

The NEW activity ANALYZE: Interest Rate Ripple Effect will engage students in understanding the role of the Federal Reserve in managing inflation, the primary tool it uses to reach its target of 2.0% inflation (the federal funds rate), and how interest rate changes impact the economy. 

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Want to brush up on your knowledge of the Federal Reserve? Start our On-Demand module The Fed: Bank of Banks.

About the Author

Ryan Wood

Ryan grew up with and maintains a love for learning. He graduated from the University of Wisconsin-Green Bay with a degree in Business Administration and worked in sports marketing for a number of years. After living in Texas, Colorado, Tennessee, and Minnesota, the call of education eventually brought Ryan back to his home state of Wisconsin where he was a Business and Marketing teacher for three years. In his free time he likes to spend time with his wife and daughter, play basketball, read, and go fishing. Now with NGPF, Ryan is excited to help teachers lead the most important course their students will ever take.