Non-interest bearing deposits held in reserve for depository institutions at their district Federal Reserve Bank. Also, excess reserves lent by banks to each other. The New York Times Financial Glossary
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federal funds UK US noun [plural] (also fed funds) GOVERNMENT, FINANCE
► money that the US government makes available for each state to pay for projects or research: »
Local taxes fund $4.7 billion of spending on schools, with state and federal funds providing the rest.
»Many of the housing projects in the area were built with federal funds and tax credits.
$70,000/$2 million/5.5 billion, etc. in federal funds »The national laboratory is spending $60 million this year in federal funds on advanced biodetection systems.
use/receive/lose federal funds »The proposal would offer states flexibility in using federal funds to expand health insurance coverage.
► in the US, money that banks give to federal reserve banks to lend to other banks who need it: federal funds (interest) rate »
The Fed has taken the decision to cut both the discount rate and the federal funds rate a quarter point.
Financial and business terms. 2012.