What is Fed Rate Monitor Tool? The federal funds rate influences the prime rate, which is the base rate from which other interest rates are determined, such as mortgage rates and the rates on personal loans. Because higher interest rates mean higher borrowing costs, people will eventually start spending less. So, Fed rate monitor calculator which is one of the investment tools is based on CME Group 30-Day Fed Fund futures prices, which tend to signal the markets’ expectations regarding the possibility of changes to US interest rates based on Fed monetary policy. The tool allows users to calculate the likelihood of an upcoming Fed rate hike or cut. Every one to two months, the Federal Open Market Committee (FOMC) – the governing body responsible for US monetary policy – meets to analyze the US and global economies and decide whether to raise, lower, or hold, interest rates. Their decisions often have quite a big effect on global markets and any trader is liable to be exposed if caught unprepared. But now, traders can use this tool to quickly familiarize themselves with market expectations and plan their speculative/futures trades accordingly.