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August 14, 2023

The Federal Reserve’s Two Key Rates: Similar but Not the Same?

Gara Afonso, Marco Cipriani, Gabriele La Spada, and Peter Prastakos

photo of the federal reserve building in Washington DC.

Since the global financial crisis, the Federal Reserve has relied on two main rates to implement monetary policy—the rate paid on reserve balances (IORB rate) and the rate offered at the overnight reverse repo facility (ON RRP rate). In this post, we explore how these tools steer the federal funds rate within the Federal Reserve’s target range and how effective they have been at supporting rate control.

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Posted at 7:00 am in Central Bank, Fed Funds, Federal Reserve, Monetary Policy | Permalink

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Liberty Street Economics features insight and analysis from New York Fed economists working at the intersection of research and policy. Launched in 2011, the blog takes its name from the Bank’s headquarters at 33 Liberty Street in Manhattan’s Financial District.

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