Once monetary policy is set, the Fed implements monetary policy by using its policy tools to ensure that the federal funds rate (FFR) stays within the range. The effective federal fund rate is determined by market forces. It is a volume-weighted median of federal funds rates across all borrowers each day.
The assessment methodology is primarily intended for external assessors at the international level and in particular, international financial institutions, such as, the World Bank and International Monetary Fund {e.g., assessment under Financial Stability Assessment Programme (FSAP)}. It also provides a baseline for national authorities to assess FMIs under their oversight/supervision.