When the FOMC conducts monetary policy, it sets the target range for
a. federal funds rate.
b. interest on reserve balances rate.
c. the overnight reverse repurchase agreement rate.
d. open market operations.
a. federal funds rate.
The Federal Open Market Committee (FOMC) sets the target range for the federal funds rate as part of its monetary policy decisions. The federal funds rate is the interest rate at which depository institutions lend balances to each other overnight. By setting a target range for the federal funds rate, the FOMC aims to influence the overall level of interest rates in the economy and thereby affect borrowing costs, investment, and economic activity.