[Moonman62]

In practice, the Prime Rate and a bunch of other rates are determined by the Funds Rate:

The federal funds rate is the primary tool that the Federal Open Market Committee uses to influence interest rates and the economy. Changes in the federal funds rate have far-reaching effects by influencing the borrowing cost of banks in the overnight lending market, and subsequently the returns offered on bank deposit products such as certificates of deposit, savings accounts and money market accounts. Changes in the federal funds rate and the discount rate also dictate changes in The Wall Street Journal prime rate, which is of interest to borrowers. The prime rate is the underlying index for most credit cards, home equity loans and lines of credit, auto loans, and personal loans. Many small business loans are also indexed to the Prime rate.

https://www.bankrate.com/rates/interest-rates/prime-rate.aspx

[Pelham]

That's true, that's the way banks choose to price their lending. I don't know of any rule that forces them to base their Prime off of the Fed Funds Rate, but it's what the industry does.

The Austrian School has often had a lot of conservative fans. The Austrian School complaint against the Fed is that they artificially lower short rates and that this creates booms and busts.

If the Fed had a money supply target or if it didn't exist then credit wouldn't expand as quickly as demand, and short rates would get bid up by borrowers.

Here's a couple of interesting articles by David Trainer who has been on both sides of the issue:

The Fed Is Irrelevant: Low Interest Rates Are The New Normal Feb 2019

How Artificially Low Interest Rates Harm Economies in the Long Term Nov 2010