If a bank needs additional reserves, it can borrow them at the federal funds rate
from other banks in a private financial market called the federal funds market.
Most loans in this market mature within one or two days, some within only a few
hours. If increased reserves are supplied to this market, the federal funds rate will
fall, making it easier for banks to borrow additional reserves and continue making
loans. Changes in the federal funds rate are also reflected in other interest rates
that influence real spending.