Title: Economic Lowdown Video Series—Monetary Policy, part 2: Two Important Interest Rates in Monetary Policy Implementation
Course: Indiana Economics Sample Syllabus > Section: Unit 7: Economic Stabilization

This video explains how the Fed uses two important interest rates to implement monetary policy. When banks lend funds to other banks from these accounts, they earn the federal funds rate. When banks hold reserves at the Fed, they earn the interest on reserve balances rate. The Fed uses interest on reserve balances rate to steer the federal funds rate.