Explain how can a change in discount rate lead to change in Fed rate? Draw figures to illustrate your analysis

Change in the discount rate lead to change in the fed rate because change in the discount rate is directly related to Federal rate as discount rate will be Central Bank rate which will be charged by the Federal Reserve Bank when they are making collateralized loans whereas, Federal funds rate is the interest rate that the depository banks will be charging from each other.

Changing the discount rate is not a viable tool for conducting the monetary policy because it is reflecting the amount which will be charged by the Federal Reserve from the various banks so it cannot be leading to controlling of monetary supply So, Interest rate is a more viable tool because it is related to day to day life of the various individuals and it would be leading to changes in the pattern of the money supply directly.