The Board of Governors of the Federal Reserve System has made changes to Regulation D by reducing the interest rate paid on balances (IORB) at Federal Reserve Banks to 4.4 percent from the previous 4.65 percent. This amendment was effective on December 19, 2024, and aims to help maintain the federal funds rate within the desired target range. The Board found it necessary to forego usual notice and comment procedures, citing the importance of prompt action in the public interest. Additionally, the rule is not subject to the Regulatory Flexibility Act or the Paperwork Reduction Act since no general notice of proposed rulemaking was required.
Simple Explanation
The government decided to lower the interest it gives to banks for keeping their money safe, from 4.65% to 4.4%, to help control how easy it is for people to borrow and spend money. They made this change quickly without asking the public first, because they thought it needed to happen soon.