Target for Federal Funds Rate Lowered by 50 Basis Points
May 15, 2001
Circular No. 11347

Discount Rate Reduced by 50 Basis Points

To All Depository Institutions in the Second Federal Reserve District:

The Federal Open Market Committee (FOMC) today lowered its target for the federal funds rate by 50 basis points, to 4 percent. In addition, the Board of Governors of the Federal Reserve System approved a 50-basis-point reduction in the discount rate, to 3½ percent.

The FOMC's announcement is contained in today's press release.

The Board's discount rate action was taken at the requests of the boards of directors of the Federal Reserve Banks of New York, Richmond, Chicago, St. Louis, and San Francisco.