Definition

The interest rate set by the U.S. Federal Reserve, which influences borrowing costs throughout the economy.

What to consider

  • Monitor the Fed rate to understand its impact on borrowing costs.
  • Consider how changes might affect your mortgage and loans.
  • Stay updated on economic news for timely adjustments.

Real world scenarios

  • When the Federal Reserve rate dropped, it led to lower interest rates on loans, making it a good time for families like the Johnsons to refinance their mortgage.

Related terms

Investments & Retirement