Central banks and interest rates

The institutions that set the price of money, and why every trader listens.

Fundamental Analysis for TradersLesson 8 of 9

All lessons

By the end of this lesson you'll be able to:

01Explain what a central bank does
02Describe how rate decisions move markets
03Interpret hawkish versus dovish

Step 1 · Read the guide

Read the guide first

Everything the quiz asks is covered in the linked guide. Read it, then answer the questions below.

What Is a Central Bank? A Trader’s Guide to Monetary Policy

Key terms

Central Bank Interest Rate Quantitative Easing Discount Rate

Step 2 · Take the quiz

Quick check

10 questions

Answer all 10, then check. Wrong answers show a hint and a link back to the guide.

Question 01
What is a central bank's main job?
Question 02
What does raising interest rates tend to do?
Question 03
What does cutting interest rates tend to do?
Question 04
Beyond the decision itself, what do traders focus on?
Question 05
A rate hike is already fully priced in and happens as expected. Where does the bigger move often come from?
Question 06
What is a hawkish central bank leaning toward?
Question 07
What is a dovish central bank leaning toward?
Question 08
Quantitative easing is when a central bank does what?
Question 09
A central bank hikes rates and signals more hikes ahead. What is the currency likely to do?
Question 10
The rate decision matches expectations, but the tone turns dovish. What is the currency likely to do?

Answered 0 of 10 · pass 70% (7/10) to complete

Fundamental Analysis for Traders8 of 9

Central banks and interest rates

The institutions that set the price of money, and why every trader listens.

Fundamental Analysis for TradersLesson 8 of 9

All lessons

By the end of this lesson you'll be able to:

01Explain what a central bank does
02Describe how rate decisions move markets
03Interpret hawkish versus dovish

Step 1 · Read the guide

Read the guide first

Everything the quiz asks is covered in the linked guide. Read it, then answer the questions below.

What Is a Central Bank? A Trader’s Guide to Monetary Policy

Key terms

Central Bank Interest Rate Quantitative Easing Discount Rate

Step 2 · Take the quiz

Quick check

10 questions

Answer all 10, then check. Wrong answers show a hint and a link back to the guide.

Question 01
What is a central bank's main job?
Question 02
What does raising interest rates tend to do?
Question 03
What does cutting interest rates tend to do?
Question 04
Beyond the decision itself, what do traders focus on?
Question 05
A rate hike is already fully priced in and happens as expected. Where does the bigger move often come from?
Question 06
What is a hawkish central bank leaning toward?
Question 07
What is a dovish central bank leaning toward?
Question 08
Quantitative easing is when a central bank does what?
Question 09
A central bank hikes rates and signals more hikes ahead. What is the currency likely to do?
Question 10
The rate decision matches expectations, but the tone turns dovish. What is the currency likely to do?

Answered 0 of 10 · pass 70% (7/10) to complete

Fundamental Analysis for Traders8 of 9

Central banks and interest rates

By the end of this lesson you'll be able to:

Read the guide first

Quick check

What is a central bank's main job?

What does raising interest rates tend to do?

What does cutting interest rates tend to do?

Beyond the decision itself, what do traders focus on?

A rate hike is already fully priced in and happens as expected. Where does the bigger move often come from?

What is a hawkish central bank leaning toward?

What is a dovish central bank leaning toward?

Quantitative easing is when a central bank does what?

A central bank hikes rates and signals more hikes ahead. What is the currency likely to do?

The rate decision matches expectations, but the tone turns dovish. What is the currency likely to do?

Central banks and interest rates

By the end of this lesson you'll be able to:

Read the guide first

Quick check

What is a central bank's main job?

What does raising interest rates tend to do?

What does cutting interest rates tend to do?

Beyond the decision itself, what do traders focus on?

A rate hike is already fully priced in and happens as expected. Where does the bigger move often come from?

What is a hawkish central bank leaning toward?

What is a dovish central bank leaning toward?

Quantitative easing is when a central bank does what?

A central bank hikes rates and signals more hikes ahead. What is the currency likely to do?

The rate decision matches expectations, but the tone turns dovish. What is the currency likely to do?