The Federal Funds Rate is an interest rate set by the Federal Open Market Committee (FOMC) to indirectly manage interest rates, inflation, and unemployment. This target rate is the interest rate at which banks borrow and lend their excess reserves to one another overnight.

Related Terms

  • Unemployment Rate

  • Supply & Demand

  • Stagflation

  • Recession

  • Money Supply

  • Monetary Policy

  • Interest Rates

  • Inflation

  • Gross Domestic Product (GDP)

  • Fiscal Policy

  • Federal Reserve

  • Consumer Price Index (CPI)

  • Business Cycle