It is called a Federal Funds Rate. Federal funds rate is the interest rate that commercial banks charge each other for very-short term loans. The FED has expressed policy in terms of a target value. The discount rate is the rate at which banks borrow from the Federal Reserve Bank for a short term loan.
The interest rate that banks charge each other for loans is called the "federal funds rate".
The federal funds rate refers to the interest rate banks charge each other on credits used to meet hold prerequisites. The federal funds rate is frequently mistaken for the rebate rate, which is the financing cost the Federal Reserve charges on advances specifically from the Federal Reserve Bank. Yet, they are not the equivalent.
The fed funds rate is a standout among the most imperative loan costs in the U.S. economy since it influences money related and budgetary conditions, which thus have a heading on basic parts of the wide economy including business, development, and inflation.
