Federal Reserve Faces Questions Over Sustained High Interest Rates

WHY IT MATTERS

The Federal Reserve is like a thermostat for the U.S. economy. When it raises interest rates, it makes borrowing money more expensive for everyone, from homebuyers to businesses to governments. Think of it like turning down the heat to prevent a room from getting too hot (inflation). But if you turn it down too much or for too long, the room gets uncomfortably cold (economic slowdown or financial stress). This matters for crypto because when traditional borrowing costs are high, it can affect how much money flows into all kinds of investments, including cryptocurrencies. Changes in Federal Reserve policy are one of the most-watched factors in both traditional and crypto markets.