1. What controls the short-term interest rate in the United States?

2. Jerome Powell, Fed Chairman, said that 1) an inflation risk is moderate; 2) the economy is doing well, and 3) a decision can be made in this week's Fed committee meeting on short-term interest rate. Assume the current short term interest rate is 1%.

3. After the the Fed chairman announced a quantitative easing, what should you do if you do not want to see the Chinese currency to appreciate in value against the U.S. currency? Why