What Happens When the Fed Raises Rates, In One Rube Goldberg Machine

After months of hemming and hawing, the Federal Reserve announced that it was raising interest rates.

It's the first increase since 2008 (when the Fed cut rates to almost zero).

The good news is that this means our economy is showing signs of strength.  But what, exactly, does raising interest rates mean? And how will it effect the economy (and our wallets)?

Turns out the answer is complicated and hard to explain (even, confusingly, if you're the chair of the Federal Reserve).

The process reminded the New York Times of a Rube Goldberg machine (you know, those incredibly intricate devices built to accomplish a simple task).

Here's the video:

  

 

 

via The NYTimes

The entire article, which explains each step in the machine in detail, is also worth a read.

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