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| Country: |
USA
| | Definition: |
Federal Funds Rate
| | Description: |
Federal Funds Rate (FFR) is an interest rate used in the operations between the banks, members of the Federal Reserve System. FFR is regulated by Federal Open Market Committee, FOMC. Though financial instruments yield is specified by the market, rates are of great importance as they serve as a guide for the market participants, FFR and bonds yield correlation is very high. Rates hikes usually stimulate debt instruments yield growth, which encourages capital flow from the stock market to the debt market. *Lately growth dynamics of bond yield and FFR has differed greatly.
| | Influence: |
High interest rates decrease consumer lending growth rates and stimulate savings increase, which triggers economic development slowdown. However, speculations on rates hikes usually trigger consumer lending boom. Rates hikes usually trigger capital inflow increase and national currency advance in the mid-term perspective. Still they may trigger economic stagnation and negative impact on the exchange markets in the long-term plan in case rates hikes are not based on high economic growth rates
| | Market Importance: |
| | Released: |
Released eight times per year, once every 1,5 month, usually on Tuesday at 2:15 PM ET
| | Source: |
The Federal Reserve System
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