The Federal Reserve Discount Rate is the interest rate set by the Federal Reserve on loans extended by the central bank to commercial banks or other depository institutions. The discount rate is also known as the "Fed Funds" rate. This interest rate affects short-term borrowing costs and can impact economic growth.The Fed lowered its discount rate in December 2008 in an effort to stimulate economic growth. The move was made in response to turmoil in financial markets and a weakening economy. In September 2011, the Fed raised its discount rate for the first time since 2006, citing concerns about inflationary pressures.The current Federal Reserve Discount Rate is 0.75%.
