- Referring to the interest paid on reserves
FRB of St. Louis
The Fed’s monetary policy tools are used to promote maximum employment, stable prices, and moderate long-term interest rates in the U.S. economy. These tools evolve over time as the economy evolves, and so it makes sense the terms that describe these tools also change.
The FRED graph above shows three different interest rates the Board of Governors has set on the reserve balances commercial banks keep at their corresponding Federal Reserve Banks.