August 27, 2013 / 7:31 PM / 4 years ago

Three Fed banks pushed for discount rate hike in July

WASHINGTON (Reuters) - Three regional Federal Reserve banks pushed for an increase in the discount rate governing emergency loans from the central bank ahead of a late July policy meeting, minutes from Fed board meetings released on Tuesday showed.

The minutes showed that the boards of directors from the Philadelphia Federal Reserve Bank, Kansas City Fed and Dallas Fed all wanted to push the discount rate up by a quarter of a percentage point.

That represented a growing chorus; ahead of the Fed’s prior policy meeting in June, only Philadelphia and Kansas City were pressing for action.

The minutes of July 29 meeting said that some directors wanted to raise the discount rate to 1 percent “as another step toward restoring a pre-crisis discount rate structure.”

Ahead of the 2007-09 financial crisis, the discount rate stood a full percentage point above the federal funds rate, the Fed’s main tool for influencing the economy. The Fed has held the federal funds rate in a zero to 0.25 percent range since December 2008.

Reporting by Timothy Ahmann; editing by Matthew Lewis

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