In an unscheduled move, the Fed increased the discount rate from 0.50% to 0.75%. According to their press release this move was decided upon to help encourage more interbank lending, instead of banks borrowing directly from the Fed. Additionally the Fed reduced the typical maximum maturity of primary credit to overnight.
This move looks like the Fed’s “Mission Accomplished” speech. They are trying to signal that they are moving back to the lender of last resort […]