together, ON RRP, IORB, discount rate and SRF define an interest rate corridor, composed by:

1️⃣ lower bound (floor) - the lowest possible interest rate
2️⃣ upper bound (ceiling) - the highest possible interest rate

the other market rates fluctuate between this floor and ceiling

Illya Gerasymchuk 2025-07-31 09:50

the FED sets a target interest rate range and 4 main explicit interest rates:

1️⃣ Overnight Reverse Repo Rate (ON RRP)
2️⃣ Interest on Reserve Balances (IORB)
3️⃣ Discount Rate - also known as Lending Rate
4️⃣ Standing Repo Facility (SRF)

more on them later (keep reading 😁)