The interest rate that the Fed has the most control over is the:
A) Federal Funds rate.
B) mortgage loan rate.
C) long-term government bond rate.
D) prime rate.

Question

Quizplus · Accepted Answer

The Federal Reserve has the most direct control over the Federal Funds rate, as it is the rate at which banks lend to one another overnight. The Fed sets a target rate for the Federal Funds rate and implements monetary policy to influence this rate. The other rates listed are influenced by market forces and other factors outside of the direct control of the Fed.

The Interest Rate That the Fed Has the Most Control