# Interest on Reserve Balances **Interest on reserve balances (IORB)** is the rate the [[Federal Reserve]] pays commercial banks on the reserves they hold in their Fed accounts. Since the shift to an [[Ample Reserves]] operating framework it has been the central bank's primary policy lever: rather than adjusting the *quantity* of reserves to push the overnight rate toward a target, the Fed simply sets the *price* it pays and lets arbitrage carry that rate across the money market. A bank will not lend reserves overnight below what the Fed pays risk-free, so IORB anchors the effective federal funds rate from above. The authority came from the Financial Services Regulatory Relief Act of 2006, accelerated to October 2008 by the Emergency Economic Stabilization Act. The rate is set by the [[Federal Reserve]] Board of Governors, not by the [[Federal Open Market Committee]] — a distinction that matters, because it means the seven presidentially appointed governors control the operative lever while the twelve-member FOMC controls the target range it is set within. As of July 30, 2026 IORB stands at **3.65 percent**, inside a target range of 3½–3¾ percent. ## See also - [[Monetary Policy Transmission Flow]] - [[Ample Reserves]] · [[Overnight Reverse Repo Facility]] · [[Standing Repo Facility]] - [[Federal Funds Rate]]