The federal funds rate (often just "the Fed rate") is the target interest rate set by the Federal Reserve at which US commercial banks lend their excess reserves to each other overnight. It is the single most important interest rate in the American economy.
The Federal Open Market Committee (FOMC) meets eight times per year to decide where to set the federal funds rate target. The committee considers inflation data (including the CPI), employment numbers, GDP growth, and global economic conditions. After each meeting, the FOMC announces whether it will raise, lower, or hold the rate.
When the Fed raises rates, borrowing becomes more expensive across the entire economy. Mortgage rates, car loans, credit cards, and corporate debt all tend to follow. Higher rates cool spending and slow inflation, but they also put pressure on asset prices (stocks, crypto, real estate). When the Fed cuts rates, borrowing gets cheaper, which stimulates spending and typically boosts risk assets.
The rate does not directly set what banks charge consumers. Instead, it establishes a floor. Banks use it as the baseline for setting their own lending rates, adding a margin on top. This is why the Fed rate ripples through everything from savings account yields to Treasury yields.
For crypto and stock traders, FOMC decisions are among the most market-moving events on the calendar. Bitcoin and risk assets tend to rally on rate cuts (or expectations of cuts) and sell off on rate hikes. Prediction markets actively trade on whether the Fed will cut or hold at each meeting, making the rate a bridge between macro economics and crypto sentiment.
The Economic Data panel on the TerminalFeed dashboard displays the current Fed Funds Rate alongside CPI and unemployment data, pulled from the FRED API (/api/economic-data). The Prediction Markets panel often features active markets on upcoming Fed decisions. For broader market context, see our Fear and Greed Index guide.