Fed maintains primary credit rate at 3.75 percent
The Federal Reserve Board maintained the primary credit rate at 3.75 percent in both its February 9 and March 18 meetings. The Board also renewed existing formulas for secondary and seasonal credit programs and kept the interest rate on reserve balances unchanged.
February's steady primary credit rate
On February 9, 2026, the Federal Reserve Board approved requests from twelve Reserve Banks to maintain the primary credit rate at 3.75 percent.
This decision followed preliminary discussions on economic and financial developments among Board members.
Directors from nine Federal Reserve Banks had voted on January 29, and three others on February 5, to establish the rate at its existing level.
The Board also renewed the formulas for secondary and seasonal credit programs.
The secondary credit rate is set 50 basis points above the primary rate, while the seasonal rate is reset every two weeks based on the average of the daily effective federal funds rate and three-month CDs.
Chair Powell, Vice Chair Jefferson, Vice Chair for Supervision Bowman, and Governors Cook and Barr voted for this action.
March decisions align with FOMC
The March 18, 2026, meeting saw the Board approve maintaining the interest rate on reserve balances at 3.65 percent, effective March 19. This aligned with the FOMC's decision to keep the federal funds rate target range at 3-1/2 to 3-3/4 percent.
The primary credit rate was again established at 3.75 percent, with all twelve Reserve Bank directors having voted to maintain this level earlier in March.
The Board also renewed the formulas for secondary and seasonal credit programs.
Voting for these actions were Chair Powell, Vice Chair Jefferson, Vice Chair for Supervision Bowman, and Governors Waller, Cook, Barr, and Miran.
Beyond rates: AI, labor, and geopolitics
The routine rate decisions mask underlying economic complexities revealed in directors' reports.
Stable labor markets and sustained AI investment contrast with hiring difficulties in specialized roles and rising nonlabor costs.
This points to a cautious outlook where structural shifts and cost pressures persist despite overall economic stability.