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

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Abstract

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.

Suggested Citation

  • Gara Afonso & Marco Cipriani & Gabriele La Spada & Peter Prastakos, 2023. "The Federal Reserve’s Two Key Rates: Similar but Not the Same?," Liberty Street Economics 20230814, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednls:96559
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    More about this item

    Keywords

    Pass-through; monetary policy implementation; Fed funds; Federal Reserve;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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