Curious Minute answer

What is the term for the interest rate at which the Federal Reserve lends money to commercial banks overnight?

The answer

Discount rate

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Why it's right

The discount rate is the interest rate the Federal Reserve charges commercial banks for short-term loans made through its lending facility (the discount window). The federal funds rate, by contrast, is the rate banks charge each other for overnight loans.

federalreserve.gov: discountrate.htm

Did you know?

The Federal Reserve's discount window has three main lending programs: primary credit, secondary credit, and seasonal credit. They serve different borrowing needs.

federalreserve.gov: discountrate.htm

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Sources: federalreserve.gov