ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The discount rate is the interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank’s lending facility-the discount window.

Detailed explanation-2: -A: The Federal Reserve sets a key interest rate, called the federal funds rate, which is the rate banks charge to each other for very short-term loans. The Federal Reserve lowered the target range for the federal funds rate to 0 to 1/4 percent.

Detailed explanation-3: -The federal funds rate, or fed funds rate, is set by the Federal Open Market Committee (FOMC) of the Federal Reserve. It can be defined as the interest rate charged to various lending institutions such as banks on unsecured loans that are borrowed overnight.

Detailed explanation-4: -What is the current federal reserve interest rate? The current Federal Reserve interest rate, or federal funds rate, is 4.50% to 4.75% as of Feb. 2, 2023.