Fed Discount Rate Minutes: All Fed Reserve Banks voted to hold discount rate in both Oct, Nov
- Today, Board members discussed economic and financial developments and issues related to possible policy actions. In connection with this discussion, Board members considered discounts and advances under the primary credit program (the primary credit rate) and discussed, on a preliminary basis, their individual assessments of the appropriate rate and its communication, which would be discussed at the joint meeting of the Board and the Federal Open Market Committee next week.
- Subject to review and determination by the Board of Governors, the directors of the Federal Reserve Banks of New York, Cleveland, Richmond, Atlanta, Chicago, and Dallas had voted on October 12, 2023, and the directors of the Federal Reserve Banks of Boston, Philadelphia, St. Louis, Minneapolis, Kansas City, and San Francisco had voted on October 19, to establish the primary credit rate at the existing level of 5.5 percent.
- Federal Reserve Bank directors generally reported strong or steady economic activity. Many directors noted strength in overall consumer spending. Labor market conditions continued to improve, with some directors citing increased labor availability and easing wage growth; still, several directors also noted persistent hiring challenges and wage pressures. In most Districts, credit conditions remained tight. Many directors noted slowdowns in residential or commercial real estate activity.
- No sentiment was expressed by the Board at today's meeting for changing the primary credit rate at this time, and the Board approved the establishment of the primary credit rate at the existing level of 5.5 percent. The Board's action today on the primary credit rate also included renewal of the existing formulas for calculating the rates applicable to discounts and advances under the secondary and seasonal credit programs. As specified by the formula for the secondary credit rate, this rate would be set 50 basis points above the primary credit rate. As specified by the formula for the seasonal credit rate, this rate would be reset every two weeks as the average of the daily effective federal funds rate and the rate on three-month CDs over the previous 14 days, rounded to the nearest 5 basis points.