They do not have to be put in a bureaucratic straitjacket and be drip-fed funds from different pots.
This reduced the spread of the primary credit rate over the fed funds rate from 100 basis points to 50 basis points.
The majority of lending in the fed funds market is overnight, but some transactions have longer maturities.
The seasonal credit rate is set from an averaging of the effective fed funds rate and 90-day certificate of deposit rates.
