Definition of federal funds rate

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TeachMeFinance.com - explain federal funds rate



federal funds rate -- The interest rate that financial institutions charge each other for overnight loans of their monetary reserves. A rise in the federal funds rate (compared with other short-term interest rates ) suggests a tightening of monetary policy, whereas a fall suggests an easing.



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Mark McCracken

Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English".


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