The Federal Reserve, or “the Fed,” is the central bank of the U.S. and plays an outsized role in shaping the nation’s monetary policy. One of its key functions is setting interest rates. Those rates determine how much Americans earn on their savings and how much they pay to borrow — including when buying a home. The Fed indirectly impacts mortgage rates by setting what’s called the federal funds rate, and that rate impacts a wide variety of financial products. As a result, when the fed funds rate rises and ...

You may not think much about the federal funds rate on a daily basis, but this key number impacts many areas of your financial life and the economy as a whole. The Federal Reserve — the country’s central bank — periodically adjusts its target rate to keep the economy running smoothly and consumer prices in check. When the federal funds rate moves up or down, so do the interest rates on bank accounts and loans. In other words, changes in the Fed’s rate impact how much your savings can grow and how much you ...

Knowing how the Federal Reserve’s monetary policy decisions impact your interest earnings over time is key to making an informed decision about where to put your money. And with a rate cut on the horizon, the best option may be a certificate of deposit (CD). CDs can be a smart way to guarantee steady returns, especially if interest rates are expected to fall in the near future. Here's why you may want to consider opening a CD before the Fed's next meeting. How the federal funds rate impacts CD rates The ...

The FOMC finally lowered the federal funds rate on Sept. 17. It was the first rate cut of 2025, and Wall Street traders currently expect two more rate cuts from the Fed before the end of the year. The federal funds rate. The Fed. The FOMC. No doubt you've heard and read these terms before. But what do they mean? How does this impact your financial life? Here's what you need to know about the federal funds rate — and why it matters. We'll keep it really simple. In this article: What is the federal funds ...