Central banks
Why central banks exist and how they affect the economy and markets.
A central bank runs monetary policy: in most countries its main task is price stability. In Ukraine it is the National Bank of Ukraine (NBU), in the US the Federal Reserve (Fed), in the euro area the European Central Bank (ECB).
The main tool is the key (policy) rate. Raising the rate makes loans more expensive and restrains inflation; cutting it stimulates the economy.
Markets react not only to decisions but also to signals about future steps. That is why the difference between a decision and expectations matters.