The accompanying chart chronicles the action the FOMC has taken on the funds rate and the discount rate over the past decade.
The funds rate is the lowest short-term market interest rate that banks charge each other on overnight loans. The discount rate is the interest rate the Fed charges banks for commercial loans. The discount rate is usually set a half-point below the fed fund rate and is largely symbolic because the Fed doesn’t engage in these loans very often.
The chart reads across the page starting with the most recent FOMC action.
Funds Discount Funds Discount
Date Rate Rate Date Rate Rate
06/25/03 1.00% 0.50% 11/06/02 1.25% 0.75%
12/11/01 1.75% 1.25% 11/06/01 2.00% 1.50%
10/02/01 2.50% 2.00% 09/17/01 3.00% 2.50%
08/21/01 3.50% 3.00% 06/27/01 3.75% 3.25%
05/15/01 4.00% 3.50% 04/18/01 4.50% 4.00%
03/20/01 5.00% 4.50% 01/31/01 5.50% 5.00%
01/03/01 6.00% 5.50% 05/16/00 6.50% 6.00%
03/21/00 6.00% 5.50% 02/02/00 5.75% 5.25%
11/16/99 5.50% 5.00% 08/24/99 5.25% 4.75%
06/30/99 5.00% 4.50% 11/17/98 4.75% 4.25%
10/15/98 5.00% 4.50% 09/29/98 5.25% 4.75%
03/25/97 5.50% 5.00% 01/31/96 5.25% 4.75%
12/19/95 5.50% 5.00% 07/06/95 5.75% 5.25%
02/01/95 6.00% 5.50% 11/15/94 5.50% 5.00%
08/16/94 4.75% 4.25% 05/17/94 4.25% 3.75%
04/18/94 3.75% 3.25% 03/22/94 3.50% 3.00%
02/04/94 3.25% 2.75%
Source: Associated Press.
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