Here’s a quick guide: How is your loan interest rate determined? Also, let me break it down for you guys: The government sets the benchmark interest rate. The actual long-term interest rate is determined by the market. Interest rates are essentially the price of money. Interest rate fluctuations are like market fluctuations, and the central bank, representing the government, can be seen as the biggest player in this market. To manipulate market prices, you need to control a large supply and demand. It’s basically the same as manipulating potato prices. For example, in this market, if you want to keep potatoes at exactly 3 yuan per pound, you can’t just have a lot of potatoes—you also need a lot of money. If you sell potatoes at 3 yuan per pound, others selling at 3.1 won’t be able to sell theirs. But what if someone sells at 2.9? You use your money to buy up all the 2.9 potatoes. So, the government’s ability to manipulate market interest rates depends on the chips it holds!