Question

The interest rate the Federal Reserve charges to banks for loans issued.

Answer 1

The interest rate that the Federal Reserve charges to banks for loans is known as the "discount rate." This is the rate at which eligible banks and other depository institutions can borrow funds from the Federal Reserve, typically on a short-term basis. The discount rate is an important tool for the Fed in implementing monetary policy, as it influences the availability of credit and overall economic activity. Changes to the discount rate can impact interest rates across the economy, affecting loans, mortgages, and savings.