why does the federal reserve change the discount rate 
the federal reserve increases or decreases the discount rate and the federal funds rate target in order to curtail or stimulate the overall level of economic activity in the country when the economy is growing too rapidly and inflation becomes a concern the fed may raise rates to discourage lending and borrowing and reduce inflationary pressures when the economy is weak or in recession the fed may lower interest rates to encourage more economic activity and spur a recovery 