Here's a semi-crazy explainer.

As simply as possible: Whenever financial people talk about "rates" they're talking about the interest rate the Federal Reserve wants banks to charge each other for lending money overnight. What they set is basically their guaranteed rate - you wouldn't borrow money at a rate lower than what the Fed will lend it out because risk free beats any amount of risk.

So. The Federal Reserve basically says "this is the rate that we're guaranteeing" which influences the rates that banks charge on all other loans at a fundamental level. The fundamental level banks charge on loans affects the amount of money your money can make - a bond is a loan and the bond market is half again as big as the stock market. So. The target rate set by the fed influences the economy by determining how much money it costs to get money.

That sounds weird but it's worth getting over: if you can make 4% per year by leaving your money in a savings account, you better make much better than 4% a year in the stock market or else why bother? Or, if you can make your stock go up 6% by borrowing money at 2% to buy back your stock, do that. Or, if your pension fund is designed around 6% interest rates and interest rates have been 2%, you have to make up that last 4% doing risky shit. Or you fail. The "prime rate" is basically the lean/rich mixture on the carburetor of the economy, if the economy was an engine that didn't run on air, it ran on the hopes and dreams of 350 million people and how they feel about money at any given minute.

What's happening, at a fundamental level, is that the banks are breaking away from that "prime rate". At a fundamental level, the Fed is losing control of the economy.