Journal Article

Setting the discount rate


Abstract: An analysis of the rationale for using the discount rate as an independent monetary policy tool (rather than simply moving the rate in alignment with market rates) so that the Federal Reserve can improve the reliability of short-term policy information and prevent market activity based on inaccurate assumptions about policy intentions.

Keywords: Discount; Monetary policy;

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Provider: Federal Reserve Bank of Cleveland

Part of Series: Economic Commentary

Publication Date: 1989

Issue: Jul

Order Number: 2