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the federal funds rate is the a. percentage of deposits that banks must hold as reserves. b. interest rate at which the federal reserve makes short-term loans to banks. c. percentage of face value that the federal reserve is willing to pay for treasury securities.

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The federal funds rate is the d. interest rate at which banks lend reserves to each other overnight.

Federal funds rate- The Federal Open Markets Committee (FOMC) establishes the federal funds rate, also known as the federal funds target rate or the fed funds rate, to guide overnight lending by US banks. It is defined as a range with an upper and lower limit. Currently, the federal funds rate ranges from 3.75% to 4%.

Federal funds, also known as fed funds, are excess reserves deposited by commercial banks and other financial institutions at regional Federal Reserve banks; these funds can then be lent to other market participants who do not have enough cash on hand to meet their lending and reserve needs.

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