The Federal Reserve sets monetary policy by influencing the Federal funds rate.

http://en.wikipedia.org/wiki/Federal_Reserve_System#cite_note-91

Interbank lending is the basis of policy

The Federal Reserve sets monetary policy by influencing the Federal funds rate, which is the rate of interbank lending of excess reserves. The rate that banks charge each other for these loans is determined in the interbank market but the Federal Reserve influences this rate through the three "tools" of monetary policy described in the Tools section below.