The Federal Reserve Board released minutes on October 13, 2026 showing that the number of regional Reserve Bank boards formally asking for a higher discount rate rose from two in August to seven by the September 16 meeting that lifted the prime rate to 7.00%. The minutes cover three separate Board meetings, held on August 17, September 9 and September 16, and were published at 2:00 p.m. EDT. They record how directors at the twelve Reserve Banks voted on the primary credit rate, the interest charged to banks that borrow at the discount window. In August the Board left that rate at 3.75% by a vote of 6 to 0, with only Kansas City and Cleveland asking for 4.00%. Three weeks later the request list had doubled. By the September meeting the Board approved 4.00%, effective September 17, and seven Reserve Banks had already voted for it. The sequence matters because the discount window rate moves in lockstep with the federal funds target, and the funds target is what sets the prime rate that prices variable consumer credit. The minutes offer the clearest available record of how quickly regional sentiment hardened in the weeks before the first Fed hike since July 2023.
- Reserve Bank requests for a 4.00% discount rate grew from two banks in August to seven by September 16.
- The Board held the primary credit rate at 3.75% on August 17 and again on September 9, both times unanimously.
- On September 16 the Board approved 4.00% by a 7 to 0 vote, effective September 17, 2026.
- Directors cited cost pressure from oil, fuel, tariffs, healthcare and the AI buildout.
- The prime rate now stands at 7.00% and the discount rate at 4.00%, per the October 13 H.15 release.
What the Discount Rate Minutes Disclosed
The Board sets the discount rate through a process separate from the one the Federal Open Market Committee follows on the federal funds target. Each of the twelve Reserve Banks has its own board of directors, and those directors vote to establish the rate their bank charges at the discount window. The Board of Governors then reviews and either approves or takes no action. The October 13 minutes record all three stages for the August and September cycle. At the August 17 meeting the Board left the primary credit rate at 3.75%, noting that no sentiment was expressed for changing it at that time. Ten Reserve Banks had voted to keep 3.75%, split across meetings on August 6 and August 13. Kansas City and Cleveland were the two outliers asking for 4.00%.
Attendance shifted across the three meetings. Chairman Kevin Warsh, Vice Chair for Supervision Michelle Bowman and Governors Christopher Waller, Lisa Cook, Jerome Powell and Michael Barr voted on August 17, with Vice Chair Philip Jefferson absent. On September 9 the roster changed: Warsh, Jefferson, Bowman, Powell and Barr voted 5 to 0 to hold at 3.75%, with Waller and Cook absent. All seven governors were present for the September 16 vote. The Board took no action on the August requests from Cleveland and Kansas City, which is the standard disposition when the Board prefers to wait for the FOMC to move first.
How the Vote Count Moved From August to September
The progression is the most concrete detail in the release. Two banks wanted 4.00% in August. By the September 3 round of director votes, four did: Cleveland, Chicago, Minneapolis and Kansas City. Eight banks still favored 3.75% at that point, among them Boston, New York, Philadelphia, Richmond, Atlanta, St. Louis, Dallas and San Francisco. One week later, on September 10, Richmond, Atlanta, Kansas City and Dallas voted to increase. Combined with the September 3 votes from Cleveland, Chicago and Minneapolis, that brought the total to seven Reserve Banks on record for 4.00% before the Board met on September 16.
The minutes also capture what directors were reporting from their districts. Economic conditions were described as stable and labor markets as generally stable. Most directors observed input cost pressures from many sources, the minutes state, listing oil and fuel prices, tariffs, healthcare costs and competition for resources from the AI buildout. That combination, firm activity alongside broadening cost pressure, pushed a majority of districts toward tightening. When the Board acted on September 16 it recorded consensus for a 25 basis point increase, approved the rate 7 to 0, and raised interest on reserve balances from 3.65% to 3.90%. Boston, New York, Philadelphia, St. Louis and San Francisco, the five banks that had not voted for an increase, were notified afterward that a 4.00% rate had been approved for them as well, also effective September 17.
Why the Discount Rate Is Not the Prime Rate
Three different rates moved together in September, and they are routinely confused. The federal funds target range, set by the FOMC, went to 3.75% to 4.00%. The primary credit rate, set by the Board, went to 4.00%, which places it at the top of that range. The prime rate went to 7.00%, because banks set prime by convention at 300 basis points above the upper bound of the funds target. The discount rate and the prime rate are therefore cousins rather than the same number, both anchored to the same policy decision but serving different borrowers.
The discount window is a lender of last resort facility for banks, not a consumer product. Primary credit goes to sound depository institutions, usually overnight. Secondary credit, priced 50 basis points higher, now stands at 4.50% and goes to institutions that do not qualify for primary credit. Seasonal credit, for smaller banks with predictable farm or tourism lending swings, resets every two weeks and sits at 4.05%. Households never borrow at any of these rates. What reaches consumers is prime, which is why the Board’s 4.00% decision registered on credit card statements rather than at a teller window. The October 13 H.15 release confirms all four figures: prime at 7.00%, the effective federal funds rate at 3.88%, primary credit at 4.00%, and the 10-year Treasury yield at 5.24%.
What a 4.00% Discount Rate Means for Your Money
The practical transmission runs through prime. Most variable rate credit cards are priced as prime plus a margin, so the September move added 25 basis points to those APRs within one or two statement cycles. On a $6,000 revolving balance, a quarter point adds roughly $15 of interest over a year if the balance is carried in full. Home equity lines of credit reprice the same way and usually faster, since many adjust at the start of the next billing period. Our breakdown of how Fed decisions reach consumer loans walks through the lag at each product, and the consumer credit rates page tracks where averages sit now.
Savers are on the other side of the same move. Deposit rates follow policy upward slowly, because banks face no competitive pressure to pass through increases quickly, so the gap between the best high yield savings accounts and the national average tends to widen after a hike rather than narrow. Certificates of deposit reprice only at issue, which makes timing matter more; current CD rates reflect the September decision while existing certificates do not. Mortgages are the exception that proves the rule. Thirty year fixed rates track the 10-year Treasury yield rather than the funds target, so current mortgage rates can fall in a week when the Fed is tightening, as they did when yields eased in early October.
Read the discount rate minutes as a district level poll, not as policy. They are published about four weeks after each Board meeting, which means they tell you what regional directors wanted before the last decision, not what the Board will do next. The useful signal is the direction of the count. A request list that grows two meetings in a row has preceded a move each time this year.
Frequently Asked Questions
What did the Fed’s discount rate minutes show?
The minutes released October 13, 2026 show that Reserve Bank requests for a 4.00% discount rate grew from two banks on August 17 to four on September 9 and seven by September 16, when the Board approved 4.00% by a 7 to 0 vote effective September 17, 2026.
What is the current Federal Reserve discount rate?
The primary credit rate, which is what most people mean by the Fed’s discount rate, is 4.00% as of the H.15 release dated October 13, 2026. It took effect on September 17, 2026, when the Board raised it from 3.75% alongside the FOMC decision. Two other discount window rates exist. Secondary credit, for institutions that do not qualify for primary credit, is 4.50%. Seasonal credit, for smaller banks with predictable lending cycles, is 4.05% and resets every two weeks based on a formula rather than a vote.
How does the Fed use the discount rate?
The discount rate prices loans the Federal Reserve makes directly to banks through the discount window, a backup funding source for institutions that cannot raise what they need in private markets. Setting it at the top of the federal funds target range makes window borrowing deliberately unattractive relative to interbank funding, which keeps the window as a backstop rather than a routine channel. The Board also uses the rate as a signal of its stance, since approving an increase requires an affirmative vote from the governors and from at least some Reserve Bank boards.
Is the discount rate the same as the prime rate?
No. They are different rates serving different borrowers, though both follow the same policy decision. The discount rate is 4.00% and applies only to banks borrowing from the Federal Reserve. The prime rate is 7.00% and is what commercial banks charge their most creditworthy business customers, set by convention at 300 basis points above the upper bound of the federal funds target range. Consumer products such as credit cards and home equity lines are indexed to prime, not to the discount rate, so prime is the number that reaches household borrowing costs.
Does the discount rate affect my credit card APR?
Only indirectly. Your variable APR is tied to the prime rate, so it moved when prime went from 6.75% to 7.00% on September 17, not because the discount rate changed to 4.00%. Both figures shifted on the same day for the same reason, which is the FOMC raising its target range. Card issuers typically apply the new prime within one or two statement cycles, and federal rules do not require advance notice for an index driven increase. Checking your current statement is the fastest way to confirm whether the change has posted.
When could the Fed change the discount rate again?
The next scheduled opportunity is the FOMC meeting on October 27 and 28, 2026, followed by December 8 and 9. The Board usually acts on the discount rate the same day the Committee changes the funds target, as it did on September 16. Reserve Bank directors can request a change at any time, and the Board can take no action on those requests, which is what happened to the August filings from Cleveland and Kansas City. Minutes for the October cycle would publish roughly four weeks after that meeting.
Watching the October 28 FOMC Decision
Two dates frame what comes next. The FOMC meets October 27 and 28 without a projections release, then December 8 and 9 with one. If the request count keeps climbing, the discount rate minutes published in late November will show it. Our Fed meeting schedule lists every remaining date, the 2026 rate forecast tracks market pricing for each one, and the current prime rate page updates the day any decision takes effect.
References
- Federal Reserve Board. “Minutes of the Board’s discount rate meetings on August 17, September 9, and September 16, 2026.” Released October 13, 2026. federalreserve.gov
- Federal Reserve Board. Discount rate meeting minutes, full text. Vote records by Reserve Bank. federalreserve.gov
- Federal Reserve Board. “H.15 Selected Interest Rates (Daily).” Released October 13, 2026. federalreserve.gov
- Federal Reserve Board. “Federal Reserve issues FOMC statement.” September 16, 2026. federalreserve.gov
- Federal Reserve Board. “FOMC Meeting Calendars and Information.” federalreserve.gov
- Federal Reserve Discount Window. Current primary, secondary and seasonal credit rates. frbdiscountwindow.org
- U.S. Treasury, Fiscal Data. “Debt to the Penny.” Record date October 9, 2026; total debt $40.301 trillion. fiscaldata.treasury.gov
- St. Louis Fed, FRED. Bank Prime Loan Rate (DPRIME) and 10-Year Treasury yield (DGS10). fred.stlouisfed.org
