The Federal Reserve will hold an emergency closed meeting of the Board of Governors of the Federal Reserve System next Monday to review and decide on the prepayment rate and discount rate charged by the Federal Reserve Bank.

Both the prepayment rate and the discount rate are tools of monetary policy, and they can affect the liquidity of money in the market by adjusting the cost of funds for banks. The following are examples of how they affect the liquidity of money in the market:

1. Impact of prepayment interest rate: Raising the prepayment interest rate will increase the cost of bank borrowing, and banks will be more cautious in lending, which will reduce lending activities in the market and lead to a decrease in market capital supply. On the contrary, lowering the prepayment interest rate can increase banks' borrowing capacity and willingness to lend, which will increase liquidity in the market, but may lead to inflation.

2. Impact of discount rate: Raising the discount rate will reduce the profitability of commercial banks, which will limit banks' willingness to lend and lead to a reduction in market funds supply; while lowering the discount rate can increase the profitability and liquidity of commercial banks and encourage banks to lend, which will promote liquidity in the market and thus promote economic growth.

Simply put, the Fed will inject liquidity into banks but at a cost.