The Federal Reserve’s surprise move to raise the discount rate, the rate it charges banks to borrow money, to 0.75 percent caught the market off guard.
Policy makers had been sending up smoke signals recently that their first move would likely be with the discount rate, but almost no one expected it to be this soon.
That sent the market into a debate: Was the move a sign the Fed was going to start tightening interest rates soon or merely a technical move?
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Fed Seeks to Calm Markets After Discount Rate Rise