Broadly, the Federal Reserve's response has followed two tracks: efforts to improve market liquidity and functioning and the pursuit of our macroeconomic objectives through monetary policy. To help address the significant strains in short-term money markets, the Federal Reserve has taken a range of steps.
Notably, on August 17, the Federal Reserve Board cut the discount rate – the rate at which it lends directly to banks – by 50 basis points, or 1/2 percentage point, and it has since maintained the spread between the federal funds rate and the discount rate at 50 basis points, rather than the customary 100 basis points.