Release Date: November 15, 1994

 

For immediate release

The Federal Reserve Board today approved an increase in the discount rate from 4 percent to 4 3/4 percent, effective immediately.

In a related move, the Federal Open Market Committee decided that the increase in the discount rate should be reflected fully in interest rates in reserve markets.

These measures were taken against the background of evidence of persistent strength in economic activity and high and rising levels of resource utilization. In these circumstances, the Federal Reserve views these actions as necessary to keep inflation contained, and thereby foster sustainable economic growth.

In taking the discount rate action, the Board approved requests submitted by the Boards of Directors of the Federal Reserve Banks of New York, St. Louis, and Kansas City. The discount rate is the interest rate that is charged depository institutions when they borrow from their district Federal Reserve banks.

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