Definition
The rate the Fed pays banks on reserves held at the central bank. Acts as the primary tool for implementing the federal funds rate target.
IORB replaced IOER (Interest on Excess Reserves) in 2021. It incentivizes banks to keep reserves at the Fed rather than lending them out. The SOFR-IORB spread measures whether funding costs are above or below this administered rate — a key gauge of money market stress. When SOFR > IORB, the repo market is tight.