What is the name of the interest rate that the Federal Reserve aims to set to influence monetary policy?

The Federal Reserve aims to steer monetary policy by targeting the federal funds rate.

More precisely, the Federal Open Market Committee sets a target for the overnight rate banks charge one another on reserve balances. The actual effective federal funds rate is determined in the market, so the Fed uses policy tools—especially interest on reserve balances and the overnight reverse repurchase facility—to keep the effective rate within the desired target range.

Changes in the target pass through financial markets. They can influence short-term borrowing costs, longer-term interest rates, asset prices, exchange rates, household spending, business investment, employment, and inflation. Raising the target generally tightens financial conditions; lowering it generally provides support to demand.

The target is not the same as the discount rate, which applies to loans banks obtain directly from the Fed. It is also not the prime rate, a commercial-bank lending benchmark influenced by broader market conditions. LIBOR was an international benchmark that has largely been discontinued, not the Fed’s principal policy target.