Fed Raises the Discount Rate

The Federal Reserve raised the discount rate from .5% up to .75%. The main thing to take away here is the increased spread between the fed funds target rate and the discount rate. The spread, now closer to .5% where it used to be .25%, provides banks further incentive to borrow privately, rather than from the discount window. This change in policy had been talked about recently, but it came as a bit of a surprise to me that it happened today. I wasn't expecting it this soon necessarily. Regardless, the Fed sees "exceptionally low levels of the Federal Funds rate for an extended period. . ." yada, yada.