Consider the case in which the Federal Reserve increases interest rates. This could lead to a capital inflow into the U.S and alter exchange rates and other economic conditions elsewhere. This might even influence global borrowing costs in some way.

The central bank therefore forms a prime part in setting the interest rate, and thence the interest rate will determine the loans and the overall economy. By knowing how these institutions operate and what impacts their decisions may have, consumers and businesses are empowered with knowledge in making financial choices. The changing economic conditions mean that the knowledge of this play by central banks keeps providing individuals the best source of retaining good borrowing options with the best terms for their loans.