Federal funds rate
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Template:Econ-stub The federal funds rate is the interest rate at which depository institutions lend balances (federal funds) at the Federal Reserve to other depository institutions overnight. It is the primary means by which the Federal Reserve implements monetary policy. Other tools at the Fed's disposal include open market operations (buying and selling bonds) and setting the reserve requirement.
The nominal rate is a target set by the governors of the Federal Reserve. The effective rate is a weighted average of the reported rates at which different amounts of the day's trading occurs through New York brokers.
Rate
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Federal_Funds_Rate_(effective).png
Historical chart of the effective Federal Funds Rate
Federal_Funds_Rate_(effective).png
Historical chart of the effective Federal Funds Rate
See also
External links
- FRB: Monetary Policy, Open Market Operations (http://www.federalreserve.gov/fomc/fundsrate.htm)