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Yes it has an affect but it is NOT directly tied the prime rate so there might not be any effect. The fed fund rate is what the gov. lends money to banks. The prime rate is really just what banks offer their customers in relation to what other banks are doing. So the net result is that banks will be making more money on the loans that they offer (Mortgage, auto, personal, etc....) But until the mortgage "crises" has calmed down a little and lending practices shape up, there will be slight movement in the prime rate.

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Does the federal government influence interest rates?

The Federal Reserve, which is a part of the federal government, sets the Prime Rate, which is a rate which banks loan to each other and also the rate at which banks can borrow from the federal government. This prime rate, in turn, affects the interest rates which consumers pay for loans.


Raising the discount rate to members banks will in turn cause the member banks to raise interest rates to their own customers?

Prime Rate ---- the rate at which banks lend money to each other and the Federal Reserve lends money to banks


What economic factors affect the home building industry?

demographic trends, such as the number of adults in the prime home-buying years (ages 25-44), changes in the mortgage financing industry, increases in energy costs and property taxes


What happens when the Federal Reserve chairman indicates that monetary policy requires a rate increase of interest at the Discount Window and an increase of reserve requirements of member banks?

If the Federal Reserve chairman says that overnight loan rate at the Discount Window will be raised, and reserve requirements of member banks will be raised, this in turn will effect interest rates of many kinds. Normally it means the prime rate of major banks to their prime customers will rise. This will also increase mortgage rates and all types of loans. The Fed does this to further its monetary policies. Normally, the Fed's action means it believes that economic activity in the economy needs to reduced to a certain extent.


Who is the prime minister of European union?

The European Union is an organisation. It does not have a prime minister. It has 27 different countries that are members of it. They are all independent countries and have their own prime ministers.What_type_of_ngovernment_does_European_Union_have

Related Questions

How are prime interest rates determined?

The Federal Funds Rate, which is the interest rate banks charge each other, is determined eight times a year by the Federal Open Market Committee (FOMC). The prime interest rate usually runs about 3% above the Federal Funds Rate.


Changes in the federal funds rate often leads to like change in the prime rate True or false?

true


Is there a way to find the average cost of funds for the second district of the federal reserve bank I know it has to be between fed funds rate and prime but how do you know where?

The GI Bill


How do you calculate prime lending rate?

Prime lending rate can be calculated by adding 300 basis points to the Federal Funds Rate, assuming you live in the U.S.


Federal government affect interest rates?

The federal government affects interest rates more than any other factor. They set the Fed Funds rate and the Prime rate. Fannie Mae, Freddie Mac, FHA. VA, and USDA loans are all backed or guaranteed by the federal government. Most of these loans are securitized into mortgage-backed bonds. Thus the coupon rates and performance of these bonds directly affect rates.


How do you calculate the current bank prime rates?

The bank prime rate is not adjusted on a regular basis. It usually adjusted in to coordinate with the Federal Funds Rate. You can find this rate on several websites at any time.


Do prime interest rates vary if you have low credit?

To the best of my knowledge I would have to say that if you have a low credit score it does not effect the prime interest rate. However, it might determine whether or not you get a loan. The prime interest rate is usually 3% above the federal funds rate. This is what the banks see and determine what there rates will be.


Who is the Deputy Prime Minister for Bosnia and Herzegovina's Federal Government?

Desnica Radivojevic is the Deputy Prime Minister for Bosnia and Herzegovina's Federal Government.


Is a prime minister in the federal government?

Yes


Is the prime minister the head of federal government?

Yes


What is the current prime interest?

April 11, 2008 This Week's Prime Rate The Prime Rate is defined by The Wall Street Journal as "The base rate on corporate loans posted by at least 75% of the nation's 30 largest banks." WSJ Prime Rate: The Wall Street Journal rate, which surveys large banks and publishes the consensus prime rate. This Week: 5.25 Last Month: 6.00 Last Year: 8.25 Federal Discount Rate: The interest rate at which an eligible financial institution may borrow funds directly from a Federal Reserve bank. This Week: 2.50 Last Month: 3.50 Last Year: 6.25 Fed Funds Rate: The interest rate at which banks and other depository institutions lend money to each other, usually on an overnight basis. This Week: 2.25 Last Month: 3.00 Last Year: 5.25 11th District Cost of Funds: A monthly cost-of-funds index (COFI) reflecting the weighted-average interest rate paid by 11th Federal Home Loan Bank District savings institutions for savings and checking accounts. The 11th district covers Arizona, California and Nevada. This Week: 3.560 Last Month: 3.970 Last Year: 4.376


Does the federal government influence interest rates?

The Federal Reserve, which is a part of the federal government, sets the Prime Rate, which is a rate which banks loan to each other and also the rate at which banks can borrow from the federal government. This prime rate, in turn, affects the interest rates which consumers pay for loans.