FEDERAL FUNDS: Deposits that banks keep with the Federal Reserve System. These deposits are important for bank stability, clearing checks between banks, money creation, and money supply control. They are also borrowed and loaned between banks through the federal funds market. The interest charged for these loans is the Federal Fund rate. See also | federal funds market | federal funds rate | bank reserves | excess reserves | Federal Reserve System | money supply | monetary policy | open market operations | reserve requirements | discount rate | bank | money creation | Federal Reserve deposits |
