so when banks and other financial institutions need to lend capital - they can do it at a rate within the target range

of course, their balance sheet capacity must allow for that - but that's another topic which I already covered in some detail in my other posts😁

Illya Gerasymchuk 2025-07-31 09:58

now you should have a clear mental model of how the Federal Reserve sets the interest rates in the market

a target range is defined, and then several different interest rates are set explicitly to steer the real interest rate into that target range