The Federal Funds Rate is the interest rate at which banks lend money to each other overnight. It is used as a tool by the Federal Reserve to influence the overall level of interest rates in the economy. When the Fed wants to slow economic growth, it will raise the target federal funds rate. This makes it more expensive for banks to borrow money, which in turn slows the economy.The current target federal funds rate is historically low, which has helped to boost economic growth in recentThe federal funds rate is the target interest rate set by the Federal Open Market Committee (FOMC). This rate is expressed as a percentage and is used to influence the borrowing and lending activities of banks and other financial institutions. The federal funds rate is one of the most important tools the FOMC uses to promote a healthy economy.The Federal Reserve recently announced that it would leave the target federal funds rate unchanged at 0.25%. This decision was widely expected by financial markets, and it means that the target rate will remain at its current level for the foreseeable future.The federal funds rate is not directly tied to the rates you see on credit cards, loans, or your savings account. However, it does influence these rates indirectly. When the federal funds rate goes up, you can expect to see a corresponding increase in the interest rates on loans and credit cards. This is because banks and other financial institutions will raise their own rates in order to keep up with interest rate.
