What the Fed actually sets
The US Federal Open Market Committee sets a target range for the federal funds rate. That rate concerns overnight borrowing between banks; it is not the rate on an individual business loan. The Federal Reserve uses monetary policy tools to influence conditions in money markets.
The Federal Reserve explains these mechanisms in more detail.
How a decision reaches businesses
A change in the Fed's target can influence other interest rates and the availability of financing. Banks and other lenders then set their own terms, taking into account loan maturity, borrower risk, competition and other factors. A particular business's terms do not have to change at the same time or by the same amount as the Fed's decision.
When assessing costs, look beyond the headline to your own agreement: whether the rate is fixed or variable, when it resets, any fees and whether early repayment is allowed.
Why effects are not immediate
Monetary policy influences spending and investment through several channels, while other factors also affect the economy and inflation. The timing and size of the effect are uncertain: the European Central Bank describes these lags as long and variable. A rate decision therefore cannot reliably predict the movement of an individual asset or a company's future income.
What to check in a news report
Find the official statement, the decision date and the exact wording: was the range held, raised or lowered? Do not confuse the target range with other rates used by a central bank. Then check the currency and maturity of your own loan or cash reserve.
For more on checking reports, see our guide to economic sources. To estimate your own cash runway, use the MoneyRadar calculators.