Fed discount rate minutes: 9 of 12 Fed bank boards sought 75 BP discount rate rise in Sept

• 9 of 12 Fed backboards sought 75 basis point discount rate rise in September
• The Federal Reserve Federal Reserve The Federal Reserve System, more commonly known as the Fed, represents the central banking system of the United States. Like other central banks globally, the Fed is responsible for monetary policy, in this case in the US.The Fed is one of the most watched and followed entities for forex traders, given its material impact on the US dollar. Founded initially in 1913, the Fed was created to perform a wide range of functions. This includes stabilizing and maintaining flexible monetary policy in the The Federal Reserve System, more commonly known as the Fed, represents the central banking system of the United States. Like other central banks globally, the Fed is responsible for monetary policy, in this case in the US.The Fed is one of the most watched and followed entities for forex traders, given its material impact on the US dollar. Founded initially in 1913, the Fed was created to perform a wide range of functions. This includes stabilizing and maintaining flexible monetary policy in the Read this Term raised the discount rate to 3.25%
• Minneapolis Fed sought 100 basis point rise to 3.5%
• The New York and San Francisco Federal Reserve banks voted for a 3% discount rate

The current discount rate is at 3.25%. The discount rate represents the rate that member banks are charged at the Federal Reserve discount window should there reserves fall below the reserve requirement at the end of the 2-week maintenance period.

The Federal Reserve is the lender of last resort. Banks have an obligation to keep a minimum reserve requirement at the Federal Reserve Bank given their balance sheet. They manage there reserves primarily through dealing with other banks in the open market.

If a bank or banks are unable to meet that reserve requirement, they would need to petition the Fed reserve at the discount window for additional funds.

In times of financial stress, a bank may have difficult borrowing from other banks as those banks are reluctant to lend for fear of a default. As a result, the troubled institution may be forced to borrow at the Fed.