Benchmark rates are standard interest rates used as a reference point for various financial products, such as loans and mortgages. They help lenders and borrowers determine the cost of borrowing money. Common benchmark rates include the Federal Funds Rate in the United States and the London Interbank Offered Rate (LIBOR). These rates are influenced by economic conditions and central bank policies. When benchmark rates rise, borrowing costs typically increase, which can slow down economic activity. Conversely, lower benchmark rates can encourage borrowing and spending, stimulating economic growth.