The discount rate is usually exactly equal to the federal funds rate.

Question

Quizplus · Accepted Answer

While the discount rate and federal funds rate are related, they are not always exactly equal. The discount rate is the interest rate at which banks can borrow directly from the Federal Reserve. The federal funds rate, on the other hand, is the interest rate at which banks lend to each other overnight. The Federal Reserve sets both rates, but they can be different depending on economic conditions and the need for monetary policy adjustments.

The Discount Rate Is Usually Exactly Equal to the Federal