What is the Federal Funds Rate?
The Federal Funds Rate is a short-term rate objective of the Federal Reserve Board. This is also known as the Fed Funds Target Rate or Intended Rate. However, the actual Fed Funds Rate is the interest rate at which depository institutions lend balances held at the Federal Reserve to other depository institutions overnight. These real rates change daily, but are usually close to the target rate desired by the Federal Reserve, and are known as the Fed Funds Effective Rate or Effective Federal Funds Rate and reflect the Market Fed Funds Rate. The history of the Effective Rate (calculated on a monthly basis) is graphed below to illustrate historical real rates. If you are looking for the Fed Funds Rate (Federal Funds Target Rate), that can be found at http://www.moneycafe.com/personal-finance/fed-funds-rate/.
Source: Federal Reserve Board
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