Difference between revisions of "Federal funds rate"
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| − | The '''Federal | + | The '''Federal funds rate''' is the rate set by the [[Federal Reserve Board]] that has a strong correlation (direct most of the time) with the [[prime rate]]. It is a lending rate for banks of balances at the Federal Generally lent to other banks. The difference between the federal funds rate and the prime rate is 3 percentage points. |
It is the way the Federal Reserve sets monetary policy and attempts to keep [[inflation]] down while also attempting to avoid [[recession]]s. | It is the way the Federal Reserve sets monetary policy and attempts to keep [[inflation]] down while also attempting to avoid [[recession]]s. | ||
| − | ==External | + | ==External links== |
| − | [http://www.federalreserve.gov/fomc/fundsrate.htm Changes to the federal funds rate since 1990] | + | * [http://www.federalreserve.gov/fomc/fundsrate.htm Changes to the federal funds rate since 1990] |
[[Category:Economics]] | [[Category:Economics]] | ||
Latest revision as of 12:23, July 13, 2016
The Federal funds rate is the rate set by the Federal Reserve Board that has a strong correlation (direct most of the time) with the prime rate. It is a lending rate for banks of balances at the Federal Generally lent to other banks. The difference between the federal funds rate and the prime rate is 3 percentage points.
It is the way the Federal Reserve sets monetary policy and attempts to keep inflation down while also attempting to avoid recessions.
