| Webster's Online Dictionary |
| Expressions | Definition | ||
| Federal funds | Participants in the federal funds market include commercial banks, savings and loan associations, government sponsored enterprises, branches of foreign banks in the United States, federal agencies, and securities firms. Many relatively small institutions that accumulate reserves in excess of their requirements lend reserves overnight to money center and large regional banks, as well as to foreign banks operating in the United States. Federal agencies also lend idle funds in the federal funds market. (references) | ||
| Federal funds rate | The federal funds rate is the interest rate at which depository institutions lend balances (federal funds) at the Federal Reserve to other depository institutions overnight. It is not (as the name might initially suggest) the rate at which the Fed lends to financial institutions. That is the discount rate. (references) | ||
Source: compiled by the editor from various references; see credits. | Top | ||
| Expressions | Domain | Definition | |
| Federal funds | Banking | 1: Short-term transactions in immediately available funds between depository institutions and certain other institutions that maintain accounts with the Federal Reserve; usually not collateralized. (references) | |
| 2: Funds deposited by commercial banks at Federal Reserve Banks, including funds in excess of bank reserve requirements. Banks may lend federal funds to each other on an overnight basis at the federal funds rate. Member banks may also transfer funds among themselves or on behalf of customers on a same-day basis by debiting balances in the various reserve banks. See Fed Wire. (references) | |||
| Federal funds | Finance | Funds on deposit in a financial intermediary's reserve account at its district Federal Reserve Bank. A member of the Federal Reserve is required to maintain a minimum average balance during any one week, based on its deposit levels during the two previous weeks. Larger commercial banks tend to need extra funds to meet minimum reserve requirements, and often borrow from other institutions, particularly smaller institutions, which usually have excess funds to lend. The seller, or lender, of federal funds can be another commercial bank within the Federal Reserve System, a non Federal Reserve member such as a Federal Home Loan Bank or an individual thrift institution which has a surplus of funds to invest on a short-term basis. The exchange of funds between lenders and borrowers occurs in the informal federal funds market, either directly between institutions or through brokers. Whereas the bulk of these funds are lent on an overnight basis, some funds referred to as term federal funds, are lent for longer periods. (references) | |
| Federal funds | Politics | All funds that compose the federal budget except those classified by law as trust funds. See trust fund. (references) | |
| Federal Funds Rate | Banking | Interest rate charged by banks with excess reserves at a Federal Reserve district bank to banks needing overnight loans to meet reserve requirements. The federal funds rates is the most sensitive indicator of the direction of interest rates, since it is set daily by the market, unlike the Prime Rate and the Discount Rate, which are periodically changed by banks and by the Federal Reserve Board. See also Fedwire, Discount Rate, Prime Rate. (references) | |
| Federal funds rate (funds rate) | Banking | 1: The interest rate at which banks borrow federal funds. (references) | |
| 2: The federal funds rate is the interest rate at which a depository institution lends immediately available funds (balances at the Federal Reserve) to another depository institution overnight. The rate may vary from depository institution to depository institution and from day to day. (references) | |||
Source: compiled by the editor from various references; see credits. | Top | ||
Topics by Level of Interest: FEDERAL FUNDS | ||||
| Topics sorted by level of Interest | Level (1=low, 600=high) | Topics sorted Alphabetically | Level (1=low, 600=high) | |
| Federal funds rate | 19 | Federal funds rate | 19 | |
Source: the editor, created by/for EVE to gauge likely levels of human interest in linguistically triggered topics (compiled across various sources, such as Wikipedia and specialty expression glosses). | ||||
