Like other market interest rates, the federal funds rate moves in reaction to changes in the demand for or supply of funds or both.

Question

Quizplus · Accepted Answer

The federal funds rate, which is the interest rate at which depository institutions lend funds maintained at the Federal Reserve to each other overnight, fluctuates in response to changes in the demand for and supply of these funds. This can be influenced by factors such as economic conditions, monetary policy decisions by the Federal Reserve, and changes in banking regulations.

Like Other Market Interest Rates, the Federal Funds Rate Moves