To All Depository Institutions and Others Concerned in the Second Federal Reserve District:
The Board of Governors of the Federal Reserve System today approved action by the board of directors of the Federal Reserve Bank of New York increasing the discount rate at this Bank from 4¾ percent to 5 percent, effective immediately.
On November 16 the Federal Open Market Committee raised its target for the federal funds rate to 5½ percent, and the Board of Governors approved an increase in the discount rate to 5 percent at the Federal Reserve Banks of Boston, Cleveland, Richmond, and Kansas City. (Later that day, the Federal Reserve Board approved the discount rate increase at the Federal Reserve Bank of San Francisco.) The November 16 announcement is available on the Board of Governor's website.
The discount rate is the rate charged depository institutions when they borrow short-term adjustment credit from their district Federal Reserve Banks. A change in the discount rate at each Reserve Bank becomes effective when voted upon by the boards of directors of those Banks and approved by the Board of Governors.