Discount Rate

This video discusses the fed funds rate, prime rate, and the fed discount rate.  The discount rate is the rate at which banks can borrow money directly from the federal reserve bank.

This video discusses how the Federal Reserve changes interest rates through managing money supply through open market operations and managing interest rates.

What is a Discount Rate?

The term discount rate can have one of two meanings.  The discount rate can be used to describe the interest rate that an eligible depository institution can borrow funds from the federal reserve.  The federal reserve sets two interest rates; the discount rate which we