The Effective Federal Funds Rate (EFFR) is the average interest rate at which depository institutions lend overnight funds to each other, reported by the Federal Reserve. It is a key short-term interest rate in the U.S. and is used to indicate the direction of monetary policy.
The Federal Reserve sets a target for the federal funds rate, and the EFFR is the rate that banks actually charge each other for overnight loans. The Federal Reserve uses the federal funds rate as a tool to influence the supply of money in the economy. When the Federal Reserve wants to stimulate the economy, it will lower the federal funds rate, making it cheaper for banks to borrow money and encouraging them to lend more. On the other hand, when the Federal Reserve wants to slow down the economy, it will raise the federal funds rate, making it more expensive for banks to borrow money and discouraging them from lending.
The EFFR is closely watched by investors and can have a significant impact on the stock market. A change in the EFFR can affect the cost of borrowing for businesses, which can in turn affect their profits and stock prices. It can also affect the returns on investments, such as bonds, which can also impact stock prices.
Effective Federal Funds Rate Market Alerts alert you whenever a new effective federal funds rate is released by the Board of the Governors of the federal reserve on a monthly basis.
With Stock Alarm you can set new effective federal funds rate market alerts. When your alert triggers you will receive a notification via push notification, email, phone call, or text message.
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