The Federal Reserve’s Two Key Rates: Similar but Not the Same?

Gara Afonso, Marco Cipriani, Gabriele La Spada and Peter Prastakos

No 20230814, Liberty Street Economics from Federal Reserve Bank of New York

Abstract: Since the global financial crisis, the Federal Reserve has relied on two main rates to implement monetary policy—the rate paid on reserve balances (IORB rate) and the rate offered at the overnight reverse repo facility (ON RRP rate). In this post, we explore how these tools steer the federal funds rate within the Federal Reserve’s target range and how effective they have been at supporting rate control.

Keywords: Pass-through; monetary policy implementation; Fed funds; Federal Reserve (search for similar items in EconPapers)
JEL-codes: E52 (search for similar items in EconPapers)
Date: 2023-08-14
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