Key interest rates set by the Federal Reserve System that are tied to the central bank’s federal funds target rate are up 0.2% as of Dec. 20, 2018, according to notices issued by the Federal Reserve Board.
Through revisions to its Regulation D, the Fed has raised to 2.4% the rate to be paid on balances maintained to satisfy reserve balance requirements (IORR) and on excess reserve balances (IOER) maintained at Federal Reserve Banks for eligible institutions. The changes are intended to “enhance the role of such rates of interest in moving the Federal funds rate into the target range established” by the Federal Open Market Committee (FOMC) – in this case, the range set in December, when the committee raised the target range a quarter point (to a range of 2.25% to 2.5%).
Also in view of the December fed funds target increase, the Fed raised by 0.2% the rate for primary credit at each Federal Reserve Bank (which also triggered an increase in the banks’ secondary credit rate).
Regulation D: Reserve Requirements of Depository Institutions (Federal Register notice)
Regulation A: Extensions of Credit by Federal Reserve Banks (Federal Register notice)