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In an announcement on Wednesday, April 30, 2008 the Federal Reserve decreased the Primary Credit Rate and the Federal Funds Rate by 25 basis points each.
The following rates are effective for the
St. Louis
district of the Federal Reserve on Thursday, May 1, 2008.
· The Primary Credit Rate decreased from 2.50 percent to 2.25 percent.
· The Federal Funds Rate decreased from 2.25 percent to 2.00 percent.
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The Federal Reserve discontinued the use of the term “discount rate” in January of 2003 and instituted a two tier discount window using the terms Primary Credit Rate and Secondary Credit Rate. The Fed has said that the effective replacement for the Discount Rate is the Primary Credit Rate. Furthermore, in Pakay v.
Davis
, the Arkansas Supreme Court ruled that a gauge other than the Discount Rate can be used to determine what is usurious under the law. The Court said that this gauge is the Primary Credit Rate adopted by the Federal Reserve.
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