Two key rate changes were approved by the Federal Reserve Board in connection with the central bank’s July 27 increase in the federal funds target rate, according to notices Tuesday in the Federal Register on revisions to the Fed’s Regulation D and Regulation A.
These rate increases were effective as of July 28, the notices state.
The Federal Open Market Committee (FOMC), the Fed’s monetary policy-setting arm, on July 27 raised the fed funds target rate by 0.75 percentage point to a range of 2.25 to 2.5 percent.
The rate paid by the Federal Reserve Banks on reserve balances, under Regulation D, was subsequently raised 0.75 percentage point to 2.4% (the IORB, or interest rate on reserve balances). The primary credit rate charged by the Reserve Banks also rose to 2.5%.
The secondary credit rate charged by the Reserve Banks, which by formula exceeds the primary credit rate by 0.5 percentage point, also rose from 2.25% to 3%.