The SBD part is not as straight forward to get your head around. My understanding of the goal for the witnesses is maintain a value of parity with the US dollar. There is a few ways they can do this. Setting the interest rate is one.
The Steem value on the other hand is controlled by the markets but also subject to any changes in the rate of new Steem creation.
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Correct, the idea is to have SBD pegged to US$. How to do this? Indeed interest rates. In addition, witnesses can also set a discount to Steem value used for calculating the rewards. It becomes even more complex, because this Steem value is not the internal market or external market Steem value, or at least not the same parameters. https://steemit.com/sbd/@timcliff/attention-sbd-converters-please-read-important-information-about-sbd-steem-conversions