Investor Glossary-fed funds rateInvestor Glossary-fed funds rateInvestor Glossary-fed funds rateInvestor Glossary-fed funds rateInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Fed Funds Rate

The HTML to link to this page
 

The Federal Reserve Board has the power to influence the money supply with the purchase and sale of government securities. This is known as open-market operations and is specified by the Federal Open Market Committee (FOMC). The fed funds rate is the rate of interest that bank members charge each other for overnight loans to meet reserve requirements. A target level is explicitly announced by FOMC for the fed funds rate. The fed funds rate is determined by the actions of FOMC based on the goals for monetary policy. The fed funds rate is lowered when the economy is contracting or growing too slowly. Alternately, the fed funds rate will be raised when consumer demands exceed the ability to produce and prices are rising too quickly. The FOMC determines the fed funds rate and the discount rate (typically 100 basis points higher than the Fed funds rate). The fed funds rate is also known as the federal funds rate.



Rate this Fed funds rate definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: in escrow, irrevocable trust, FICO score, labor relations, required rate of return, current ratio, debt service coverage, margin rate, risk management, retained earnings, covered put, 1035 exchange, average price per share, phantom income, 144a, Key Rate Duration, implied volatility, quality assurance, cancelled check, reverse mortgage, stock market close, limit order, inflation, liquidity ratio, diluted share, command economy, option premium, EBITDA, ex-dividend, minority interest, FTSE, annual return, 401a, LIBOR, balance sheet, wholly-owned subsidiary, per diem, ex-dividend date, Zero Cost Collar, deferred revenue, stock split, 1031 exchange, VIX, real GDP, deferred tax, class C shares, open position, dividends payable, APR


Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
Investor Glossary Index >>> # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
©2004-2014 Investor Glossary - All rights reserved - Terms of Use