# How the Fed's interest-rate decision ripples through your life

> A process map exported from forks.world (https://forks.world). Author: Brian. Source: https://forks.world/p/cmv0kplgj002fjn0652cqcctk
> It describes who does what, in what order, and with which technology. Read the plain-language sections first; the JSON at the end is the exact, complete data.

## Summary

- 15 steps across 1 layer
- Persona: The Federal Reserve, Banks, Households
- Technology / systems: Economic data, Markets

## Pain points

Where this process hurts, worst first:

- **Effects take months, so wait and watch** (How the Fed's interest-rate decision ripples through your life; painful): Policy works with long and uncertain delays

## How to read this file

- A process is made of **layers**. The main layer is the top level; any step of kind `subprocess` opens a detail layer with its own lanes and steps.
- **Lanes** are either persona (people/roles) or technology (systems). Each step belongs to one lane; `using` lists tools a person uses for that step.
- Step kinds: `start`, `task`, `decision` (its arrows carry the answer as a label), `subprocess`, `end`.

## How the Fed's interest-rate decision ripples through your life

Lanes:
- Economic data: technology / system (id `data`)
- The Federal Reserve: person / role (id `fed`)
- Banks: person / role (id `banks`)
- Households: person / role (id `you`)
- Markets: technology / system (id `mkts`)

Steps, in the order they run:

1. **Inflation, jobs and growth numbers come in** [start; Economic data; id `f1`]
   - then The rate-setting committee meets
2. **The rate-setting committee meets** [task; The Federal Reserve; id `f2`]
   - then Is inflation too high?
3. **Is inflation too high?** [decision; The Federal Reserve; id `f3`]
   - if "Yes" go to Raise the target interest rate; if "No" go to Is the economy weak?
4. **Raise the target interest rate** [task; The Federal Reserve; id `f4`]
   - then Banks adjust what they charge each other
5. **Banks adjust what they charge each other** [task; Banks; id `f6`]
   - then Mortgage, credit card and savings rates move
6. **Mortgage, credit card and savings rates move** [task; Banks; id `f9`]
   - then Borrowing costs more or less, and saving pays more or less
7. **Borrowing costs more or less, and saving pays more or less** [task; Households; id `f10`]
   - then People spend and borrow more or less
8. **People spend and borrow more or less** [task; Households; id `f11`]
   - then Stocks, bonds and the dollar react
9. **Stocks, bonds and the dollar react** [task; Markets; id `f12`]
   - then Does inflation or unemployment respond?
10. **Does inflation or unemployment respond?** [decision; Economic data; id `f13`]
   - if "Yes" go to Adjust again at the next meeting; if "Slowly" go to Effects take months, so wait and watch
11. **Adjust again at the next meeting** [task; The Federal Reserve; id `f14`]
   - then Inflation, jobs and growth numbers come in
12. **Effects take months, so wait and watch** [task; The Federal Reserve; id `f15`] ⚠ PAIN POINT (painful): Policy works with long and uncertain delays
   - then Inflation, jobs and growth numbers come in
13. **Is the economy weak?** [decision; The Federal Reserve; id `f5`]
   - if "Yes" go to Cut the rate; if "No" go to Hold steady
14. **Cut the rate** [task; The Federal Reserve; id `f7`]
   - then Banks adjust what they charge each other
15. **Hold steady** [task; The Federal Reserve; id `f8`]
   - then Banks adjust what they charge each other

```mermaid
flowchart LR
  subgraph l_data["Economic data"]
    n_f1(["Inflation, jobs and growth numbers come in"])
    n_f13{"Does inflation or unemployment respond?"}
  end
  subgraph l_fed["The Federal Reserve"]
    n_f2["The rate-setting committee meets"]
    n_f3{"Is inflation too high?"}
    n_f4["Raise the target interest rate"]
    n_f5{"Is the economy weak?"}
    n_f7["Cut the rate"]
    n_f8["Hold steady"]
    n_f15["Effects take months, so wait and watch"]
    n_f14["Adjust again at the next meeting"]
  end
  subgraph l_banks["Banks"]
    n_f6["Banks adjust what they charge each other"]
    n_f9["Mortgage, credit card and savings rates move"]
  end
  subgraph l_you["Households"]
    n_f10["Borrowing costs more or less, and saving pays more or less"]
    n_f11["People spend and borrow more or less"]
  end
  subgraph l_mkts["Markets"]
    n_f12["Stocks, bonds and the dollar react"]
  end
  n_f1 --> n_f2
  n_f2 --> n_f3
  n_f3 -->|"Yes"| n_f4
  n_f3 -->|"No"| n_f5
  n_f4 --> n_f6
  n_f5 -->|"Yes"| n_f7
  n_f5 -->|"No"| n_f8
  n_f7 --> n_f6
  n_f8 --> n_f6
  n_f6 --> n_f9
  n_f9 --> n_f10
  n_f10 --> n_f11
  n_f11 --> n_f12
  n_f12 --> n_f13
  n_f13 -->|"Yes"| n_f14
  n_f13 -->|"Slowly"| n_f15
  n_f15 --> n_f1
  n_f14 --> n_f1
```

## Full data (JSON)

```json
{
  "title": "How the Fed's interest-rate decision ripples through your life",
  "maps": {
    "m_root": {
      "id": "m_root",
      "lanes": [
        {
          "id": "data",
          "name": "Economic data",
          "type": "system"
        },
        {
          "id": "fed",
          "name": "The Federal Reserve",
          "type": "person"
        },
        {
          "id": "banks",
          "name": "Banks",
          "type": "person"
        },
        {
          "id": "you",
          "name": "Households",
          "type": "person"
        },
        {
          "id": "mkts",
          "name": "Markets",
          "type": "system"
        }
      ],
      "steps": [
        {
          "id": "f1",
          "kind": "start",
          "lane": "data",
          "next": [
            {
              "to": "f2"
            }
          ],
          "uses": [],
          "label": "Inflation, jobs and growth numbers come in"
        },
        {
          "id": "f2",
          "kind": "task",
          "lane": "fed",
          "next": [
            {
              "to": "f3"
            }
          ],
          "uses": [],
          "label": "The rate-setting committee meets"
        },
        {
          "id": "f3",
          "kind": "decision",
          "lane": "fed",
          "next": [
            {
              "to": "f4",
              "label": "Yes"
            },
            {
              "to": "f5",
              "label": "No"
            }
          ],
          "uses": [],
          "label": "Is inflation too high?"
        },
        {
          "id": "f4",
          "kind": "task",
          "lane": "fed",
          "next": [
            {
              "to": "f6"
            }
          ],
          "uses": [],
          "label": "Raise the target interest rate"
        },
        {
          "id": "f5",
          "kind": "decision",
          "lane": "fed",
          "next": [
            {
              "to": "f7",
              "label": "Yes"
            },
            {
              "to": "f8",
              "label": "No"
            }
          ],
          "uses": [],
          "label": "Is the economy weak?"
        },
        {
          "id": "f7",
          "kind": "task",
          "lane": "fed",
          "next": [
            {
              "to": "f6"
            }
          ],
          "uses": [],
          "label": "Cut the rate"
        },
        {
          "id": "f8",
          "kind": "task",
          "lane": "fed",
          "next": [
            {
              "to": "f6"
            }
          ],
          "uses": [],
          "label": "Hold steady"
        },
        {
          "id": "f6",
          "kind": "task",
          "lane": "banks",
          "next": [
            {
              "to": "f9"
            }
          ],
          "uses": [],
          "label": "Banks adjust what they charge each other"
        },
        {
          "id": "f9",
          "kind": "task",
          "lane": "banks",
          "next": [
            {
              "to": "f10"
            }
          ],
          "uses": [],
          "label": "Mortgage, credit card and savings rates move"
        },
        {
          "id": "f10",
          "kind": "task",
          "lane": "you",
          "next": [
            {
              "to": "f11"
            }
          ],
          "uses": [],
          "label": "Borrowing costs more or less, and saving pays more or less"
        },
        {
          "id": "f11",
          "kind": "task",
          "lane": "you",
          "next": [
            {
              "to": "f12"
            }
          ],
          "uses": [],
          "label": "People spend and borrow more or less"
        },
        {
          "id": "f12",
          "kind": "task",
          "lane": "mkts",
          "next": [
            {
              "to": "f13"
            }
          ],
          "uses": [],
          "label": "Stocks, bonds and the dollar react"
        },
        {
          "id": "f13",
          "kind": "decision",
          "lane": "data",
          "next": [
            {
              "to": "f14",
              "label": "Yes"
            },
            {
              "to": "f15",
              "label": "Slowly"
            }
          ],
          "uses": [],
          "label": "Does inflation or unemployment respond?"
        },
        {
          "id": "f15",
          "kind": "task",
          "lane": "fed",
          "next": [
            {
              "to": "f1"
            }
          ],
          "pain": {
            "note": "Policy works with long and uncertain delays",
            "level": 2
          },
          "uses": [],
          "label": "Effects take months, so wait and watch"
        },
        {
          "id": "f14",
          "kind": "task",
          "lane": "fed",
          "next": [
            {
              "to": "f1"
            }
          ],
          "uses": [],
          "label": "Adjust again at the next meeting"
        }
      ],
      "title": "How the Fed's interest-rate decision ripples through your life",
      "parent": null
    }
  }
}
```