The Federal Open Market Committee (FOMC) left the intended federal funds rate unchanged at its September 24 meeting. The Committee last altered the intended funds rate in February, lowering it from 5.5% to 5.25%. The federal funds rate is the interest rate that banks pay on overnight loans to one another, and it forms an anchor for other short-term rates. Banks can also obtain reserves temporarily by borrowing from the Federal Reserve System, which last lowered the rate charged on such loans - the discount rate - from 5.5% to 5.0% in February.
Suggested citation: “Monetary Policy,” Federal Reserve Bank of Cleveland, Economic Trends, no. 96-10, pp. 02, 10.01.1996.