What Is the Federal Funds Rate? The Foundation of Every Rate
Saturday 25 July 2026 at 18:39
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The federal funds rate is the rate banks charge each other for overnight loans. It's the wholesale price of money — the foundation that every other interest rate is built on top of. Mortgages, credit cards, and business loans are all priced as a markup on this one number. The Fed doesn't set it directly. They set a target range and use open market operations to hit it. When the federal funds rate moves, the cost of everything moves with it. This maps to Module 6.1 — Macro Indicators and Sentiment. https://youtu.be/jaHdDcsuqm8
Key Takeaways
The federal funds rate is the rate banks charge each other for overnight loans
It's the wholesale price of money — every other rate is built on top of it
Mortgages, credit cards, and business loans are all priced as a markup on this one number
The Fed sets a target range and uses open market operations to hit it
This maps to Module 6.1 — Macro Indicators and Sentiment
Get the full breakdown and the complete Larke Cycle framework.
For educational purposes only. Not financial advice. Past performance does not guarantee future results. Trading involves risk. Consult a qualified financial adviser before making investment decisions.
I'm Russell Larke — BA (Hons) Business Management, currently completing an MSc in Systems Thinking in Practice, with plans to pursue a doctorate. I've run an environmental consultancy as Managing Director and have traded financial markets for years. I teach the Larke Cycle — a testable framework for understanding market structure beyond chartism. Regards, Russell Larke BA (Hons) Business Management | MSc Candidate (Systems Thinking) Beyond the Chart
What Is the Federal Funds Rate? The Foundation of Every Rate
The federal funds rate is the rate banks charge each other for overnight loans. It's the wholesale price of money — the foundation that every other interest rate is built on top of. Mortgages, credit cards, and business loans are all priced as a markup on this one number. The Fed doesn't set it directly. They set a target range and use open market operations to hit it. When the federal funds rate moves, the cost of everything moves with it. This maps to Module 6.1 — Macro Indicators and Sentiment. https://youtu.be/jaHdDcsuqm8
Key Takeaways
Get the full breakdown and the complete Larke Cycle framework.
Join the Full Course on Skool →
For educational purposes only. Not financial advice. Past performance does not guarantee future results. Trading involves risk. Consult a qualified financial adviser before making investment decisions.
I'm Russell Larke — BA (Hons) Business Management, currently completing an MSc in Systems Thinking in Practice, with plans to pursue a doctorate. I've run an environmental consultancy as Managing Director and have traded financial markets for years. I teach the Larke Cycle — a testable framework for understanding market structure beyond chartism. Regards, Russell Larke BA (Hons) Business Management | MSc Candidate (Systems Thinking) Beyond the Chart