This indicator for ThinkorSwim plots the Effective Federal Funds Rate as a study on the lower subgraph chart.
The Federal Reserve uses the EFFR as a primary tool for implementing monetary policy.
Effective Federal Funds Rate (EFFR) is calculated as “a volume-weighted median of overnight federal funds transactions.”
Why is the Federal Funds Rate important?
A higher Fed Funds Rate can lead to increased borrowing costs and slower economic growth, while a lower rate can stimulate economic activity.
Financial markets pay close attention to the Federal Funds Rate since it significantly influences stock prices, interest rates, and currency values.
Fed Funds Rate Indicator for ThinkorSwim
# Indicator Name: Fed Funds Rate Indicator # Version: 1.0.0 # Developer: Melvin C. # URL: https://thinkscript101.com/fed-funds-rate-indicator-thinkorswim/ declare lower; def FEDrate = close("EFFR:FRED"); plot data = FEDrate; plot zero = 0;
A higher Federal Funds Rate can impact investment and spending choices because it often results in higher borrowing rates for consumers and companies.
A lower Fed Funds Rate can boost the economy by making borrowing more affordable and promoting investment and spending.