Policy rate
The key interest rate a central bank sets to influence borrowing and inflation.
2 min read · Reviewed September 2026
In plain words
The policy rate (federal funds rate, base rate, refi rate) is the overnight lending rate set by the central bank. Raising it makes borrowing more expensive, cooling demand and — eventually — inflation. Cutting it stimulates the economy.
Frequently asked questions
What are current central bank policy rates?
Policy rates change with each central bank meeting. The Federal Reserve, ECB, and Bank of England all publish their current rates and meeting schedules on their websites.