When implementing monetary policy,the variable the Federal Reserve watches most closely is the

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The federal funds rate is the interest rate at which banks lend to each other overnight to meet reserve requirements. The Federal Reserve sets a target range for this rate as part of monetary policy. By adjusting the target range, the Federal Reserve can influence the availability and cost of credit in the economy, which can impact economic growth and inflation. Therefore, the Federal Reserve closely monitors the federal funds rate when implementing monetary policy.

When Implementing Monetary Policy,the Variable the Federal Reserve Watches Most