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Monetary Policy

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The events of September 11 raised the possibility of disruptions in the payments system and the federal funds market. Soon after the attacks, the Federal Reserve announced that the discount window was “available to meet liquidity needs.” Discount window borrowing rose dramatically in the ensuing days, and the Trading Desk conducted large volumes of open market purchases to supplement bank reserves. Float levels rose markedly because of transportation disruptions. Late in the week, discount window borrowing and float returned to more normal levels.

Suggested citation: "Monetary Policy," Federal Reserve Bank of Cleveland, Economic Trends, no. 01-10, pp. 04, 10.01.2001.

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