Boston Fed sought cut in discount rate in Jan
(Reuters) - The Boston Federal Reserve unsuccessfully wanted in January to trim the rate the Federal Reserve charges banks for emergency loans, in part to align the so-called discount rate with the rate the Fed charges foreign central banks for dollar swaps.
Forecasts for modest growth ahead, continuing weakness in housing markets and high unemployment were also among reasons why the directors of the regional Fed bank sought a cut to 0.5 percent from the current level of 0.75 percent, according to minutes of meetings released on Tuesday by the Fed.
The Fed cut its principal policy rate, the fed funds rate, to near zero in December 2008.
While Boston sought a decrease the Kansas City Fed wanted to raise the discount rate to 1 percent, in part to restore the 1 percentage point spread between the fed funds rate and the discount rate that prevailed before the financial crisis that began in 2007.