Which interest rate is known to fluctuate the most among various rates?

The federal funds rate is known to fluctuate the most among various interest rates because it is the rate at which banks lend reserve balances to other banks overnight. This rate is influenced by the monetary policy decisions made by the Federal Reserve and can change frequently in response to economic conditions, inflation data, and other financial indicators. The Federal Reserve actively adjusts this rate to control monetary supply and influence economic activity.

Due to its nature and direct connection to monetary policy, the fluctuations in the federal funds rate can lead to immediate, rippling effects in the financial markets, affecting other interest rates, including those for loans and mortgages. The central bank's meetings and announcements about potential rate changes tend to create significant volatility in the financial markets.

Conversely, while the discount rate and prime rate are also important, they tend to be more stable as they are influenced by the federal funds rate and overall economic conditions rather than being subject to as frequent or immediate adjustments as the federal funds rate. The London Interbank Offered Rate (LIBOR) can have fluctuations as well, but since it is based on the average rates at which major global banks lend to one another, its volatility may not match that of the federal funds rate since it reflects different underlying factors.