together, ON RRP, IORB, Discount Rate and SRF create a corridor for rates, which stay within the target 4.25%-4.50%

Illya Gerasymchuk -

2025-07-31 10:43

together, ON RRP, IORB, Discount Rate and SRF create a corridor for rates, which stay within the target 4.25%-4.50%

👉 by "firms" i mean select non-bank financial institutions - think dealers, market makers & other wholesale debt institutions

Illya Gerasymchuk 2025-07-31 10:40

current rates set by FED:

1️⃣ ON RRP - 4.25% (floor) - firms won't lend below
2️⃣ IORB - 4.40% (supplementary floor) - banks won't lend below
3️⃣ Discount Rate - 4.50% (ceiling) - banks won't borrow above
4️⃣ SRF - 4.50% (supplementary ceiling) - banks & firms won't borrow above

🧵 How Does the Federal Reserve Set Interest Rates?

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