The interest rate that banks charge each other for overnight loans is called

Question

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The interest rate that banks charge each other for overnight loans is called the federal funds rate. This rate is determined by the supply and demand of reserves in the banking system and is used as a benchmark for other interest rates, such as the prime rate and consumer loans. The discount rate is the interest rate at which banks can borrow funds directly from the Federal Reserve, and the penalty rate is a higher interest rate charged to borrowers who default on their loans.

The Interest Rate That Banks Charge Each Other for Overnight