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Fed kept discount rate steady; two regional banks wanted a changed
November 20, 2012 / 7:11 PM / 5 years ago

Fed kept discount rate steady; two regional banks wanted a changed

WASHINGTON (Reuters) - The Federal Reserve declined conflicting requests from two regional Fed boards to change the rate it charges for emergency loans to banks, keeping it steady at 0.75 percent.

The Boston Fed’s board sought a cut in the discount rate the Fed charges banks for emergency loans to 0.5 percent, while the Kansas City Fed again wanted a hike to 1 percent, according to minutes of the Fed’s discount rate deliberations released on Tuesday.

The Fed in September announced a new open-ended program of asset purchases, starting with fresh buying of $40 billion per month. It made no changes to the discount rate.

According to the minutes of discount rate deliberations from late September to late October, regional Fed directors maintained their outlook for moderate economic growth in coming months.

The U.S. economy grew 2 percent in the third quarter, but economists generally see that pace easing in the final months of the year.

Regional Fed directors said businesses remain cautious about hiring and investing because of uncertainty about U.S. budget prospects.

Reporting By Pedro Nicolaci da Costa; Editing by Leslie Adler

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