Since the middle of 1999, the Fed's discount rate has followed the federal funds interest rate, such that the discount rate is now a passive tool in the conduct of U.S. monetary policy.

Question

Quizplus · Accepted Answer

The discount rate is set by the Federal Reserve and has indeed become more of a passive tool in monetary policy, primarily following the direction of the federal funds rate to maintain a consistent policy stance and signal the Fed's policy intentions.

Since the Middle of 1999, the Fed's Discount Rate Has