First coming into widespread use in the 1970s, “core inflation” can refer to any measure of inflation in which more volatile prices — such as food and energy — are given lower weights. Core inflation rates are more stable than overall (“headline”) inflation rates and are therefore a more reliable gauge of the economy’s underlying level of inflationary pressure.

The key interest rate controlled by the Federal Reserve, the “Fed funds” rate is the rate at which banks lend one another the reserves (known as federal funds) that they hold in deposit accounts at the twelve regional Federal Reserve Banks.

The Federal Reserve is a system comprised of a number of distinct entities. Twelve regional Federal Reserve Banks handle mechanical aspects of the operation of the payments system (e.g., clearing checks); the Federal Reserve Board of Governors in Washington oversees and makes policy for the system as a whole; and the Federal Open Market Committee, a rotating group made up of members of the board of governors and presidents of the regional reserve banks, is the monetary policymaking group that sets the federal funds interest rate.