There’s a pretty surprising mistake in today’s NYT story about yesterday’s interest-rate cut. The offending sentence comes in the second paragraph of Steven R. Weisman’s article:

The Fed’s action brought the federal funds rate — the rate it charges banks for overnight loans — to 2 percent, from 2.25 percent, the lowest level since November 2004.

The problem is that clause between em-dashes. The “rate [the Fed] charges banks for overnight loans” is not the federal funds rate, it’s the discount rate. The federal funds rate is the rate that banks charge each other for overnight loans, which rate the Fed is able to control through open-market operations.

As the headline of this post indicates, I was about to put this down to a brief slip of editorial attention, but looking back through the NYT archive, it looks like a fairly common error on the paper’s part. Here’s a similar sentence from an article Weisman wrote a few days ago:

The committee also lowered the federal funds rate, the rate it charges banks for overnight loans, by three-quarters of a point, to the current 2.25 percent.

And here’s another from an article in March, this one written by Edmund L. Andrews:

The central bank lowered its federal funds rate — the rate it charges banks for overnight loans — by three-quarters of a percentage point, to 2.25 percent, and left the door open to additional rate cuts in the months ahead.

In case you don’t trust me on this, here’s how Reuters (correctly) described the federal funds rate in a story about yesterday’s cut:

The central bank’s action takes the bellwether federal funds rate target, which banks charge each other for overnight loans, to 2 percent — the lowest since December 2004.

And for good measure, here’s the AP’s version:

The latest Fed move brought the federal funds rate — the interest that banks charge each other — down to 2.25 percent, the lowest since late 2004.