The federal funds rate is the rate which banks charge one another for overnight loans used to provide needed capital to meet reserve requirements. The federal funds rate is the rate which the federal reserve may adjust thru open market operations such as the buying and selling of US treasuries. As of March 2010, the federal funds rate hovers between 0 and .25%.
The Federal Funds rate abbriviated as Fed Funds is the overnight loan rate between banks. The Discount Window is the Federal Reseve Bank of New York's overnight interst rate charged to banks from the Federal Reserve, called the discount window rate.
Federal Funds Rate
An intended fed funds rate is the interest rate at which private depository institutions, mostly banks, lend balances (federal funds) at the Federal Reserve to other depository institutions, usually done overnight.
The federal funds rate is the interest rate banks charge on loans in the federal funds market. The federal funds rate is not set administratively by the Fed. Instead, the rate is determined by the supply of reserves relative to the demand for them.
The current average as of June 16-17 Fed Funds rate can be calculated at .10.
The Federal Funds rate abbriviated as Fed Funds is the overnight loan rate between banks. The Discount Window is the Federal Reseve Bank of New York's overnight interst rate charged to banks from the Federal Reserve, called the discount window rate.
Federal Funds Rate
An intended fed funds rate is the interest rate at which private depository institutions, mostly banks, lend balances (federal funds) at the Federal Reserve to other depository institutions, usually done overnight.
The federal funds rate is the rate which banks charge one another for overnight loans used to provide needed capital to meet reserve requirements. The federal funds rate is the rate which the federal reserve may adjust thru open market operations such as the buying and selling of US treasuries. As of March 2010, the federal funds rate hovers between 0 and .25%.
The federal funds rate is the interest rate banks charge on loans in the federal funds market. The federal funds rate is not set administratively by the Fed. Instead, the rate is determined by the supply of reserves relative to the demand for them.
The FOMC sets targets for the Discount Rate. By trading securities, the Federal Reserve Bank of New York, it affects the Federal Funds Rate which is the interest rate by which banks lend to each other overnight.
The current average as of June 16-17 Fed Funds rate can be calculated at .10.
The impact on the federal funds rate, by any policy, would depend on which policy is in question. Some policies will cause the federal funds rate to increase while other policies will cause the federal funds rate to decrease.
Financial and banking jargon is particularly arcane and confusing because different people use different terms for the same ideas, concepts, and rates. Other terms sound the same but are different. The federal funds rate, for example, is sometimes called the federal funds target rate or the intended federal funds rate. The latter two terms are more descriptive, because both imply that the Federal Reserve does not have direct control over the rate. The actual federal funds rate is the weighted average of interest rates that banks charge each other. It's set by open market competition but comes remarkably close to the target set by the Fed. The discount rate, in contrast, is usually about a half to a full percentage point higher than the federal funds rate. The Federal Reserve does control that one. The discount rate is the interest rate the Federal Reserve charges other depository institutions for very short-term (usually overnight) loans.
If the Fed wants to raise the federal funds interest rate, it will sell securities to remove reserves from the banking system.
above the federal funds rate
above the federal funds rate