Fed Rate

Definition ∞ The Fed rate, or Federal Funds Rate, is the target interest rate set by the U.S. Federal Reserve for overnight lending between banks. It serves as a primary tool for monetary policy, influencing borrowing costs throughout the economy. Changes to this rate can have substantial effects on asset valuations, including digital assets.
Context ∞ Discussions surrounding the Fed rate are critical in understanding macroeconomic influences on cryptocurrency markets. Market participants closely monitor Federal Reserve policy announcements and statements for indications of future rate adjustments, as these can significantly impact investor sentiment and capital flows into digital assets.