The federal funds rate is a benchmark that influences other interest rates throughout the economy. The Federal Reserve doesn't control the federal funds rate directly. Instead, it uses various monetary policy tools to steer the benchmark toward a target range, which is currently 4.75% to 5%.

President Joe Biden is celebrating the Federal Reserve’s decision to lower interest rates by saying it shows that inflation has eased.

The Federal Reserve on Wednesday almost certainly will lower interest rates for the first time in more than four years as the U.S. central bank starts to reverse the restrictive conditions it imposed to beat back inflation,