What is the fed rate?

What it means: The interest rate at which banks and other depository institutions lend money to each other, usually on an overnight basis. The law requires banks to keep a certain percentage of their customer's money on reserve, where the banks earn no interest on it. read more

In the United States, the federal funds rate is the interest rate at which depository institutions (banks and credit unions) lend reserve balances to other depository institutions overnight, on an uncollateralized basis. Reserve balances are amounts held at the Federal Reserve to maintain depository institutions' reserve requirements. read more

The Federal Reserve sets the rate at one of its eight FOMC meetings. The current fed funds interest rate is 2.0%. The Federal Reserve sets the rate at one of its eight FOMC meetings. read more