Financial markets pay close attention to changes in the federal funds rate because these changes:

Financial markets give careful consideration to changes in the government reserve's rate in light of the fact that these progressions .show the Fed's arrangements for money related strategy. Financial markets is a market in which individuals exchange monetary securities, products, and other fungible things of significant worth at low exchange costs and at costs that reflect free market activity.

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marvineetesh3 marvineetesh3 · Answer 2 · 2022-04-13T06:52:38+02:00

The modifications in the federal funds rate are nearly followed by financial markets because they reveal the Federal Reserve's monetary policy intentions.

What is financial market?

A financial market is a place where people can exchange low-cost financial assets and derivatives.

Inventories and bonds, raw materials, and valuable metals, each of which are considered as commodities in the financial markets, are illustrations of securities.

These markets play the close attention to changes in the federal funds rate because these changes indicate the Fed's plans for monetary policy.

Therefore, the financial market is affected by the changes in the rate of federal funds.

Learn more about the Financial market, refer to:

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