# Federal Funds Rate

*Macro & Economy — Finicade finance glossary*

The federal funds rate is the overnight rate at which US banks lend reserves to each other, and the Fed's primary policy lever. The Fed sets a target range and steers the market rate inside it using the interest it pays on reserves. Everything else prices off it: mortgage rates, credit cards, corporate borrowing and the discount rate applied to every future cash flow in the economy.

**Also known as:** fed funds rate, policy rate, target rate

**Related terms:** [FOMC](https://finicade.com/glossary/fomc), [Monetary Policy](https://finicade.com/glossary/monetary-policy), [SOFR](https://finicade.com/glossary/sofr), [Discount Window](https://finicade.com/glossary/discount-window), [Yield Curve](https://finicade.com/glossary/yield-curve)

Source: https://finicade.com/glossary/federal-funds-rate