Federal funds rate: What it is and how it affects you

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 ...