Fed releases July discount rate meeting minutes, says process is separate from fed funds target setting

The U.S. Federal Reserve Board has released minutes from its July 20 and July 29 discount rate meetings, showing that the board reviewed and determined the interest rate charged on discount window loans made available to depository institutions. The document also states that the process used to set the discount rate is separate from the process through which the Federal Open Market Committee sets the target range for the federal funds rate. The minutes indicate that, at the two July meetings, the board examined and set the rate level for credit accessed by depository institutions through the discount window. The discount rate serves as the Federal Reserve’s rate tool for short-term lending to commercial banks and directly affects liquidity costs across the banking system. The release focuses on the board’s review and determination of that rate framework rather than any linkage to the federal funds target-setting process.