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The _____ is the interest rate that the federal reserve charges on loans to banks. interest on excess reserves federal funds rate discount rate reserve requirement ratio

Respuesta :

The federal funds rate is the interest rate that banks charge each other to borrow or lend excess reserves overnight.

What is federal funds rate ?

The Federal Open Market Committee's (FOMC) target interest rate is referred to as the federal funds rate (FOMC). The rate at which commercial banks overnight lend and borrow each other's surplus reserves is the aim.

  • The FOMC's target interest rate is known as the federal funds rate.
  • This is the overnight borrowing and lending rate between commercial banks for their surplus reserves.
  • Eight times a year, the FOMC determines the target federal funds rate depending on the state of the economy.
  • Short-term interest rates on credit cards and consumer loans can be influenced by the federal funds rate.
  • Because it affects the stock market, investors also keep a watch on the federal funds rate.

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