The federal funds rate is the competitively-determined market rate banks charge each other for overnight loans to meet reserve requirements, which the Fed influences by injecting or withdrawing money, whereas the discount rate is administratively set (posted, not a market rate) at which member banks can borrow directly from the Fed's discount window.
definitionpending
Speaker
Russ RobertsEvidence Quote
“federal funds rate is the rate that banks charge each other for overnight loans”
Created: 6/15/2026, 9:37:51 AM
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