Understanding interest rates can be very complicated for a lot of people. I'm just starting to get a feel for how it works. Unless you are in a business where you need to know what the interest rate is on a daily basis, it doesn't seem necessary to pay attention to it. Some examples would be bankers, brokers,financial lawyers,and real estate people -knowing the rates is part of their job.
But the average person just doesn't have a need to know the interest rate unless you are buying a house, or buying a financial product, like certificates of deposit or treasury bills.
I didn't know that people in the government got together to decide whether to reset the interest rate. They are trying to keep rates low enough so there will be lending, but if rates are set too low, profits are hard to make.
So, the benchmark rate is the foundation and then banks,and government can set their own rate above that benchmark. When shopping for banks lately, I have noticed there is quite a difference in the rates different banks offer. I don't quite understand why that's so.