Conversely, in a weaker economy, businesses tend to hold on to their cash because they are not certain they will have enough income in the future. The demand for borrowed money drops. Lenders will then put their money on sale and drop interest rates. In order to control the economy (control inflation), the Federal Government (Federal Reserve BAnk - Alan Greenspan) controls the rate that it charges banks for their funds. the government can thus raise interest rates to slow the economy or drop them to pump it up.