Circular

Target for Federal Funds Rate Lowered by 25 Basis Points

August 21, 2001
Circular No. 11374

Discount Rate Reduced by 25 Basis Points

To All Depository Institutions in the Second Federal Reserve District:

The Federal Open Market Committee (FOMC) today lowered its target for the federal funds rate by 25 basis points, to 3 ½ percent. In addition, the Board of Governors of the Federal Reserve System approved a 25-basis-point reduction in the discount rate, to 3 percent.

The FOMC's announcement is contained in today's Federal Reserve press release.

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, Richmond, Chicago, Kansas City, and Dallas.

William J. McDonough
President