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How will the levels of interest rates paid on excess balances be chosen to facilitate the implementation of monetary policy?

April 26, 2017balances chosen excess facilitate Implementation interest rates levels monetary paid policy

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How will the levels of interest rates paid on excess balances be chosen to facilitate the implementation of monetary policy?

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The Board of Governors has set the initial rate to be paid on interest on excess balances at the lowest target federal funds rate for a reserve maintenance period less 75 basis points. However, the Board is prepared to adjust this spread as needed to help the Desk achieve the operating target for the average federal funds rate set by the FOMC, based on experience and in response to evolving market conditions.