What is the difference between federal funds rate and interest rates?

Both the federal funds rate and interest rates are some of the most important financial indicators in the U.S. The chief distinction is that the federal funds rate sets the range that banks will lend or borrow to each other overnight.

What is a Fed Funds rate?

“ (A fed funds rate of) 5.5 percent is a lot closer to normal than 0 percent interest rates ever were.” On its most technical basis, the fed funds rate filters out through the rest of the economy because it’s the interest rate that banks charge each other for overnight lending.

How does the Federal Reserve determine the price of borrowing money?

Here's an explanation for The Federal Reserve determines the price of borrowing money through one of its primary interest rates, the fed funds rate. The fed funds rate influences various financial decisions and products, such as credit card rates and mortgage rates.