Yes, the prospects for changes in Federal Reserve policy will affect the decisions related to financing a purchase. The Federal Reserve (Fed) provides stability in the financial system of the country. It is the supervisory body of controlling the money supply in the country. It is the controller of all credit policies including the interest rates. The amount of money that the banks should keep with it as reserves and the interest rates of banks is decided by the Fed.
This is done by Fed in order to ensure the minimum level of liquidity and the safety of investments. The primary role of the Fed is to implement such monetary policies which help in maintaining price stability, helps in generating employment opportunities, and thus leads to economic growth. Financial decisions related to purchasing are the price of the product, the interest rate charged by banks for the product, etc. The buying and the selling of government securities is the prime important tool through which the Fed controls the money supply in the market.
Variations made in the requirement of reserves are a control tool that can help the Fed in regulating the money supply in the market. In the open market, an increase in the money supply in the market reduces the short-term interest rates of borrowing. A decrease in the requirement of reserves made by the Federal Reserve increases the maximum limit available with the banks which in turn increases the supply of money in the market. During inflation when the GDP is high, the money pumped into the economy also increases which increases the interest rates also become high so proper inflationary control should be done by the Fed.
When fed purchases the government securities then also the money supply in the market increases. A decrease in the discount rate to banks by the Fed can also expand the monetary policy of the economy which decreases the interest rates. If the Federal Reserve controls the money supply in the market properly then it will increase the purchasing power of people because market factors are important in purchase decisions.