Policy Rate

政策金利 ／ policy-rate　—　Institutions

A short-term interest rate guided by the central bank. The subject of "rate hikes" and "rate cuts."

In Japan, this is the uncollateralized overnight call rate; in the United States, it is the federal funds rate. Regardless of the country, what is adjusted is the short-term interbank interest rate. ⚠ When reading a headline about a "rate hike," interpret it through its three pathways of impact: on your savings, your borrowings, and prices.