Which of the following rates does the Fed actually set?
A) the Federal Funds rate
B) market interest rates
C) the discount rate
D) The Fed sets each of these rates.

Question

Quizplus · Accepted Answer

The Fed directly sets the discount rate, which is the interest rate charged to commercial banks and other depository institutions on loans they receive from the Federal Reserve's discount window. The Federal Funds rate is targeted by the Fed but not directly set, and market interest rates are influenced by the Fed's policies but not directly set by it.

Which of the Following Rates Does the Fed Actually Set