Circular
Target for Federal Funds Rate Lowered by 50 Basis Points
April 18, 2001
Circular No. 11340

Discount Rate Reduced by 50 Basis Points

To All Depository Institutions and Others Concerned in the Second Federal Reserve District:

The Federal Open Market Committee (FOMC) today lowered its target for the federal funds rate by 50 basis points, to 4½ percent. In addition, the Board of Governors of the Federal Reserve System approved a 50-basis-point reduction in the discount rate, to 4 percent.

In its press release, the FOMC said that it "continues to believe that against the background of its long-run goals of price stability and sustainable economic growth and of the information currently available, the risks are weighted mainly toward conditions that may generate economic weakness in the foreseeable future."

The Board's discount rate action was taken at the requests of the boards of directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Cleveland, Atlanta, Minneapolis, Dallas, and San Francisco.