The New York Fed produces a number of reference interest rates that provide insight into the dynamics of money markets, which is useful for evaluating the effectiveness of monetary policy implementation.
Reference rates play several important roles in financial markets that support efficient market functioning. They facilitate trading in standardized contracts, which can lower transaction costs and improve market liquidity. They can reduce information asymmetries by providing a transparent, independent pricing source. And a well-designed, robust reference rate that is resistant to manipulation can limit participants’ incentives to misreport pricing for settling a contract.
The New York Fed has served as an administrator and producer of reference rates since at least the 1950s, when it began publishing the daily effective federal funds rate, and most recently started publishing the Treasury repo reference rates in 2018. The New York Fed is committed to producing robust and resilient reference rates that are aligned with international best practices, including IOSCO's Principles for Financial Benchmarks. The New York Fed's reference rates are compliant with these best practices.