Powell admits Trump was right

[Vambram]

Gemini is wrong then, because what the Fed sets is the federal funds rate, not the prime rate. Prime rates are set individually by lenders, and are typically based on the federal funds rate, but they're not the same thing.

Although the Federal Reserve has no direct role in setting the prime rate, many banks choose to set their prime rates based partly on the target level of the federal funds rate--the rate that banks charge each other for short-term loans--established by the Federal Open Market Committee.

What is the prime rate, and does the Federal Reserve set the prime rate?

The Federal Reserve Board of Governors in Washington DC.

www.federalreserve.gov

Sounds like to me that Gemini is correct about this.

 

[Pommer]

Sounds like to me that Gemini is correct about this.

Yes, right up front this AI? (is it) says quite clearly that the Federal Reserve does “no direct role” in setting the Prime interest rate.

You may have made a tiny mistake, but cannot, for some reason, admit to making it.

 

[Vambram]

Yes, right up front this AI? (is it) says quite clearly that the Federal Reserve does “no direct role” in setting the Prime interest rate.

You may have made a tiny mistake, but cannot, for some reason, admit to making it.

I did not make a mistake. The Federal Reserve sets a rate by which the banks base their rates upon.

 

[Vambram]

The Federal Reserve does not directly control all interest rates, but it exerts substantial influence over short-term rates by setting the target range for the federal funds rate, which acts as a benchmark for other interest rates in the economy.

How the Fed Influences Interest Rates​

The Federal Reserve’s primary tool is the federal funds rate—the rate at which banks lend reserves to each other overnight. The Federal Open Market Committee (FOMC) meets regularly to set a target range for this rate. By adjusting this target, the Fed can encourage borrowing (by lowering rates) or cool inflation (by raising rates).

Mechanisms Used by the Fed​

• The Fed sets two administered rates: the interest rate paid on reserve balances (IORB) and the Overnight Reverse Repo Facility rate (ON RRP).
• Open market operations, such as buying or selling Treasury securities, change the supply of reserves in the banking system to help keep the federal funds rate within its target range.
• By influencing the federal funds rate, the Fed indirectly affects borrowing costs for mortgages, credit cards, and business loans—yet it does not set these rates directly.

Independence and Limits of Control​

The Fed operates independently, with the freedom to set monetary policy—primarily through the setting of interest rates—without interference from Congress or the President. However, the Fed cannot dictate precise lending rates at private banks or set rates for every financial product.
In summary, the Federal Reserve controls the target range for the federal funds rate, which shapes many other interest rates, but it does not dictate or fix all interest rates throughout the economy.

https://www.perplexity.ai/search/does-the-federal-reserve-contr-ya2amzomTUeIHeaBD290HA

 

[DaisyDay]

Kudos for admitting that the Federal Reserve does not directly control all interest rates.

 

[Vambram]

Kudos for admitting that the Federal Reserve does not directly control all interest rates.

I think you are splitting hairs when it is clearly obvious to me that the vast majority of big banks follow and obey the prime rate set by the Federal Reserve.

 

[Pommer]

I think you are splitting hairs when it is clearly obvious to me that the vast majority of big banks follow and obey the prime rate set by the Federal Reserve.

I can agree that hairs are being split.