US bank rate study notes

• 1. Fed Funds Rate : lowest : decided by the Fed, does not affect loans from the Fed, affects loans between other banks and each other; an over-night rate
• 2. Discount Rate : medium : decided by the Fed, affects loans from the Fed to other banks ; pricier than the FFR, so the Fed is a lender of last resort when other banks can't cough up funds at the FFR.
• 3. Prime Rate : highest : decided by market forces, on a regional basis, an index which is used to price loans from non-Fed banks to consumer.