Two different numbers
The federal funds target is a range set by the FOMC for overnight lending between banks. The bank prime loan rate is the rate banks post as a base for many business and consumer loans. The Federal Reserve publishes the prevailing Prime rate in its H.15 release.
How they relate
For many years Prime has typically sat about 3 percentage points above the top of the fed funds target, and banks usually change Prime soon after a Fed decision. That's a long-standing convention, not a contract term — your loan follows whatever its documents say.
Why it matters for your loan
If your note says "Prime + 1.5%," your rate follows Prime, not the Fed headline. If it references SOFR or a Treasury rate, the timing and size of changes can differ. Some loans use "Wall Street Journal Prime"; others a specific bank's posted rate. Read the definition.
Where to check the numbers
Use official sources: the FOMC statement for the fed funds target and the Federal Reserve H.15 Selected Interest Rates release for Prime, both at federalreserve.gov. Note the date of any figure you rely on.
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Examples use hypothetical numbers. Educational content, not financial, legal or tax advice. Profit Theory is not a lender; lenders set their own requirements and make all credit decisions.