Fed funds rate


The interest rate that banks charge each other for the use of Fed funds. It changes daily and is a sensitive indicator of general interest rate trends. The Fed funds rate is one of the two interest rates set by the Fed, the other being the discount rate. While the Fed can't directly affect this rate, it effectively controls it in the way it buys and sells Treasuries to banks. This is the rate that reaches individual investors, though the changes usually aren't felt for a period of time. also called Federal funds rate.

Use Fed funds rate in a sentence

Browse Definitions by Letter: # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
fed funds Fed model