It's still the market that decides the interest rate. The Fed simply adjusts the money supply by buying or selling short term securities (historically) in order to create or soak up liquidity. The interest rate that results from these "Open Market transactions" are what you hear. The focus on short term securities means that in the long run the supply of money is still private-market driven.

There's an increased focus on affecting the medium-term or longer-term interest rates through the purchase of toxic assets like mortgage backed securities.

Not sure if that answers or clarifies anything though. I can say more if you're interested.