Federal Funds rate, sometimes just called the Fed rate, is a commonly used tool of monetary policy in US. Normally, there are 3 common monetary tools: open market operations, reserve requirements, and the discount rate, to affect money supply. The discount rate is the borrowing rate that the Fed charges banks directly when banks borrow money from the Fed's discount window. However, banks do not borrow from the Fed usually for some reasons, they do prefer borrowing from other banks instead, that's why I think, the Fed rate plays more important role in monetary policy in practice.
The Fed rate is a leading indicator of the US market interest rate: the higher the Fed rate implies the higher market interest rate normally. As a result, the higher the Fed rate implies the higher the cost of borrowing money, and it will discourage investment.
Usually, economics or finance textbooks would use the term "the interest rate" that do not divide into borrowing or lending rate, mortgage rate or other loan interest rate because different interest rated usually go up or go down in the same direction. And for the sake of simplicity, we assume only one prevailing interest rate. In this view, the Fed rate is the most representative interest rate in US, or even for the world.
For more details about the impact of the change of the interest rate, you may read econ or finance textbook or you may visit
http://en.wikipedia.org/wiki/Interest_rate for reference.
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