Is the Fed Tightening?

The federal funds effective rate is the intrestrate that commercial banks charge each other for unsecured overnight loans of reserves. Historically, the way the fed would raise or lower that rate is by adjusting the reserves in the system. But since the fall of two thousand eight it has switched tactics and now pays an interest rate on reserves. The act of doing that reduces the high powered money in the system which then gives to the private sector so they can borrow more from the Fed.