The U.S. Federal Reserve is scheduled to meet in the middle of the next month to decide their next move and some analysts think that the Fed can go for rate hikes at that meeting. Let’s have a look at the minutes of Fed’s discount rate meetings. Federal Reserve members meet, which is less publicized to decide on the discount rates.

What are discount rates?

• The discount rate is interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility--the discount window.
   
• Federal Reserve Banks offer three discount window programs to depository institutions: primary credit, secondary credit, and seasonal credit, each with its own interest rate.

• Current interest rates are 1% for primary credit, 1.5% for secondary credit and 0.55% for seasonal credit and FED funds rate is at 0.25-0.5%.

The decision is not binding, more of a recommendation.

The minutes of the July meeting shows,

• The President of Federal Reserve Bank of Boston, Eric Rosengren, Loretta Mester of Cleveland Fed, Jeffrey Lacker of Richmond Fed, John Williams of San Francisco Fed, Esther George of Kansas City Fed,  Patrick Harker of Philadelphia Fed, Robert Kaplan of Dallas Fed, and James Bullard of St. Louis Fed voted in favor of 25 basis points rate hike.

Among the above, Esther George, Loretta Mester, Eric Rosengren, and James Bullard are voting members this year.

So, if the voting in September goes alike, we could see a 6-4 divided Fed in favor of stability.