A Quote by Milton Friedman

When they so-called 'target the interest rate', what they're doing is controlling the money supply via the interest rate. The interest rate is only an intermediary instrument.

Milton Friedman

Quote Topics

Controlling Doing Instrument Interest Interest Rate Intermediary Money Only Rate So-Called Supply Target Via

Quote Author

Milton Friedman
American - Economist
July 31, 1912 - November 16, 2006

Our tree is actually a tree of the short-term interest rate. The average direction in which the short-term interest rate moves depends on the level of the rate. When the rate is very high, that direction is downward; when the rate is very low, it is upward.

John Hull

Monetary policy is like juggling six balls... it is not 'interest rate up, interest rate down.' There is the exchange rate, there are long term yields, there are short term yields, there is credit growth.

Raghuram Rajan

A higher IOER rate encourages banks to raise the interest rates they charge, putting upward pressure on market interest rates regardless of the level of reserves in the banking sector. While adjusting the IOER rate is an effective way to move market interest rates when reserves are plentiful, federal funds have generally traded below this rate.

Janet Yellen

What central banks can control is a base and one way they can control the base is via manipulating a particular interest rate, such as a Federal Funds rate, the overnight rate at which banks lend to one another. But they use that control to control what happens to the quantity of money. There is no disagreement.

Milton Friedman

Profits in business always depend on the rate of interest: the higher the interest, the higher the rate of profit required.

James Buchan

The real challenge was to model all the interest rates simultaneously, so you could value something that depended not only on the three-month interest rate, but on other interest rates as well.

John Hull

The Interest Rate Reduction Act takes a first step toward providing critical stability by eliminating the threat of an immediate interest rate increase, while making clear the need to move toward a long-term solution that serves the best interests of taxpayers and borrowers.

John Kline

The central banks cannot control interest rates. That's a mistake. They can control a particular rate, such as the Federal Funds rate, if they want to, but they can't control interest rates.

Milton Friedman

First, pay off your high-interest-rate debt. If you have student loan debt - that's low interest rate; that has a tax benefit - you can leave that out. A mortgage can be an OK one. Credit card debt is poison. That needs to be paid off right away.

Sallie Krawcheck

Sleep is the interest we have to pay on the capital which is called in at death; and the higher the rate of interest and the more regularly it is paid, the further the date of redemption is postponed.

Arthur Schopenhauer

The insurance companies do not refer to the key policy rate when they send their statements. We can only control that rate. Long-term interest rates are determined largely by global financial markets.

Mario Draghi

It does not stand to give banks millions of dollars at an interest rate of one percent, when banks charge students an interest rate of 6 percent. Why should the banks be scalping students?

Jesse Jackson

One grave and fundamental Keynesian error is to persist in regarding the interest rate as a contract rate on loans instead of the price spreads between stages of production. The former, as we have seen, is only the reflection of the latter.

Murray Rothbard

What we have to be careful is that if we drop interest rates where the rate of interest is lower than inflation, then savers will not put money in financial savings and move it to gold and real estate, which is bad for India.

Uday Kotak

The discounting presumably is to be done for each period of time at that rate of interest which represents the alternative cost of employing capital in the occupation in question; that is, at the rate which the entrepreneur could obtain in other investments