Policy interest rates in the U.S. and Europe are forecasted to decrease gradually between 2024 and 2027, following exceptional increases triggered by soaring inflation between 2021 and 2023. The U.S. federal funds rate stood at 5.38 percent at the end of 2023, the European Central Bank deposit rate at four percent, and the Swiss National Bank policy rate at 1.75 percent. With inflationary pressures stabilizing, policy interest rates are forecast to decrease in each observed region. The U.S. federal funds rate is expected to decrease to 3.5 percent, the ECB refi rate to 2.65 percent, the Bank of England bank rate to 3.33 percent, and the Swiss National Bank policy rate to 0.75 percent by 2025. An interesting aspect to note is the impact of these interest rate changes on various economic factors such as growth, employment, and inflation. The impact of central bank policy rates The U.S. federal funds effective rate, crucial in determining the interest rate paid by depository institutions, experienced drastic changes in response to the COVID-19 pandemic. The subsequent slight changes in the effective rate reflected the efforts to stimulate the economy and manage economic factors such as inflation. Such fluctuations in the federal funds rate have had a significant impact on the overall economy. The European Central Bank's decision to cut its fixed interest rate in June 2024 for the first time since 2016 marked a significant shift in attitude towards economic conditions. The reasons behind the fluctuations in the ECB's interest rate reflect its mandate to ensure price stability and manage inflation, shedding light on the complex interplay between interest rates and economic factors. Inflation and real interest rates The relationship between inflation and interest rates is critical in understanding the actions of central banks. Central banks' efforts to manage inflation through interest rate adjustments reveal the intricate balance between economic growth and inflation. Additionally, the concept of real interest rates, adjusted for inflation, provides valuable insights into the impact of inflation on the economy.

The benchmark interest rate in Hong Kong was last recorded at 4.75 percent. This dataset provides the latest reported value for - Hong Kong Interest Rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.

The benchmark interest rate in India was last recorded at 6.25 percent. This dataset provides - India Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

In January 2025, global inflation rates and central bank interest rates showed significant variation across major economies. Most economies initiated interest rate cuts from mid-2024 due to declining inflationary pressures. The U.S., UK, and EU central banks followed a consistent pattern of regular rate reductions throughout late 2024. In early 2025, Russia maintained the highest interest rate at 21 percent, while Japan retained the lowest at 0.5 percent. Varied inflation rates across major economies The inflation landscape varies considerably among major economies. China had the lowest inflation rate at 0.5 percent in January 2025. In contrast, Russia maintained a high inflation rate of 9.9 percent. These figures align with broader trends observed in early 2025, where China had the lowest inflation rate among major developed and emerging economies, while Russia's rate remained the highest. Central bank responses and economic indicators Central banks globally implemented aggressive rate hikes throughout 2022-23 to combat inflation. The European Central Bank exemplified this trend, raising rates from 0 percent in January 2022 to 4.5 percent by September 2023. A coordinated shift among major central banks began in mid-2024, with the ECB, Bank of England, and Federal Reserve initiating rate cuts, with forecasts suggesting further cuts through 2025 and 2026.

Key information about United States Long Term Interest Rate

• United States Treasury Notes Yield: Constant Maturity: Nominal: 10 Years was reported at 4.45 % pa in Feb 2025, compared with 4.63 % pa in the previous month.
• US Long Term Interest Rate data is updated monthly, available from Apr 1953 to Feb 2025.
• The data reached an all-time high of 15.32 % pa in Sep 1981 and a record low of 0.62 % pa in Jul 2020.
• Long Term Interest Rate is reported by reported by Federal Reserve Board.

CEIC calculates monthly Long Term Interest Rate from daily 10 year Treasury Constant Maturity Yield. The Federal Reserve Board provides 10 year Treasury Constant Maturity Yield. Long Term Interest Rate prior to January 1962 is sourced directly from the Federal Reserve Board.


Related information about United States Long Term Interest Rate

• In the latest reports, US Short Term Interest Rate: Month End: Treasury Bills: 3 Months was reported at 4.20 % pa in Feb 2025.
• The cash rate (Policy Rate: Month End: Effective Federal Funds Rate) was set at 4.33 % pa in Feb 2025.

Forecast: 3-Month Bank Deposit Interest Rates in Indonesia 2023 - 2027 Discover more data with ReportLinker!

Forecast: Bank Lending Interest Rate in Italy 2024 - 2028 Discover more data with ReportLinker!

Forecast: Bank Lending Interest Rate in South Korea 2024 - 2028 Discover more data with ReportLinker!

According to the European Central Bank's survey of professional forecasters, the interest rate on the ECB's main refinancing operations is expected to decrease from 2.9 percent in January 2025 to 1.9 percent in 2026.

Key Interest Rate: Central Banks data was reported at 2.000 % in 2026. This records a decrease from the previous number of 2.375 % for 2025. Key Interest Rate: Central Banks data is updated yearly, averaging 0.719 % from Dec 1999 (Median) to 2026, with 28 observations. The data reached an all-time high of 3.625 % in 2023 and a record low of -0.500 % in 2021. Key Interest Rate: Central Banks data remains active status in CEIC and is reported by Organisation for Economic Co-operation and Development. The data is categorized under Global Database’s Ireland – Table IE.OECD.EO: Interest Rate: Forecast: OECD Member: Annual.

The benchmark interest rate in Mexico was last recorded at 9.50 percent. This dataset provides - Mexico Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

From 2003 to 2025, the central banks of the United States, United Kingdom, and European Union exhibited remarkably similar interest rate patterns, reflecting shared global economic conditions. In the early 2000s, rates were initially low to stimulate growth, then increased as economies showed signs of overheating prior to 2008. The financial crisis that year prompted sharp rate cuts to near-zero levels, which persisted for an extended period to support economic recovery. The COVID-19 pandemic in 2020 led to further rate reductions to historic lows, aiming to mitigate economic fallout. However, surging inflation in 2022 triggered a dramatic policy shift, with the Federal Reserve, Bank of England, and European Central Bank significantly raising rates to curb price pressures. As inflation stabilized in late 2023 and early 2024, the ECB and Bank of England initiated rate cuts by mid-2024, and the Federal Reserve also implemented its first cut in three years, with forecasts suggesting a gradual decrease in all major interest rates between 2025 and 2026. Divergent approaches within the European Union While the ECB sets a benchmark rate for the Eurozone, individual EU countries have adopted diverse strategies to address their unique economic circumstances. For instance, Hungary set the highest rate in the EU at 13 percent in September 2023, gradually reducing it to 6.5 percent by October 2024. In contrast, Sweden implemented more aggressive cuts, lowering its rate to 2.25 percent by February 2025, the lowest among EU members. These variations highlight the complex economic landscape that European central banks must navigate, balancing inflation control with economic growth support. Global context and future outlook The interest rate changes in major economies have had far-reaching effects on global financial markets. Government bond yields, for example, reflect these policy shifts and investor sentiment. As of June 2024, the United States had the highest 10-year government bond yield among developed economies at 4.09 percent, while Switzerland had the lowest at 0.69 percent. These rates serve as important benchmarks for borrowing costs and economic expectations worldwide.

Key information about Germany Long Term Interest Rate

• Germany Long Term Interest Rate: Month Avg: Germany: ECB Harmonised was reported at 2.18 % pa in Dec 2024, compared with 2.31 % pa in the previous month.
• Germany Long Term Interest Rate data is updated monthly, available from Jan 1990 to Dec 2024.
• The data reached an all-time high of 9.09 % pa in Oct 1990 and a record low of -0.65 % pa in Aug 2019.
• Long Term Interest Rate is reported by reported by CEIC Data.

The European Central Bank provides monthly Harmonised Long Term Interest Rate. The data reflects primary market yields.


Related information about Germany Long Term Interest Rate

• In the latest reports, Germany Short Term Interest Rate: Month End: EURIBOR: 3 Months was reported at -0.57 % pa in Nov 2021.
• The cash rate (Policy Rate: Month End: Main Refinancing Operations) was set at 3.15 % pa in Dec 2024.
• Germany Exchange Rate against USD averaged 0.92 (USD/EUR) in Jun 2023.

Forecast: Bank Lending Interest Rate in Egypt 2024 - 2028 Discover more data with ReportLinker!

Based on an "illustrative scenario" in which the United Kingdom (UK) moves to a comprehensive free trade agreement with the European Union (EU) on the 1st of January 2021, this forecast shows the expected annual average bank base interest rate in response to the current Covid-19 pandemic. In a bid to minimize the economic effects of the Covid-19 virus, on the 19th of March 2020 the Bank of England cut the official bank base rate to a record low of 0.1 percent. This historic low came just one week after the Bank of England cut rates from 0.75 percent to 0.25 percent in a bid to prevent mass job cuts in the United Kingdom. In the current forecast scenario, bank interest rates are set to stay between 0.1 percent and 0.2 percent up to 2022.

Forecast: Bank Lending Interest Rate in Philippines 2024 - 2028 Discover more data with ReportLinker!

LU: Long-Term Interest Rate: Government Bonds: Single Hit Scenario data was reported at -0.300 % in 2021. This records an increase from the previous number of -0.310 % for 2020. LU: Long-Term Interest Rate: Government Bonds: Single Hit Scenario data is updated yearly, averaging 3.236 % from Dec 1994 (Median) to 2021, with 28 observations. The data reached an all-time high of 7.229 % in 1995 and a record low of -0.310 % in 2020. LU: Long-Term Interest Rate: Government Bonds: Single Hit Scenario data remains active status in CEIC and is reported by Organisation for Economic Co-operation and Development. The data is categorized under Global Database’s Luxembourg – Table LU.OECD.EO: Interest Rate: Forecast: OECD Member: Annual. IRL - Long-term interest rate on government bonds; ECB reports a harmonised long-term interest rate starting mid-may 2010. before, the Luxembourg government did not have outstanding long-term debt securities with a residual maturity of close to ten years. therefore, the yield on long-term bond(s) issued by a private credit institution with a residual maturity close to 10 years is presented for the period up to mid-may 2010 and is thus not fully harmonised for that period.

The benchmark interest rate in Sweden was last recorded at 2.25 percent. This dataset provides the latest reported value for - Sweden Interest Rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.

Forecast: Bank Lending Interest Rate in Japan 2022 - 2026 Discover more data with ReportLinker!

The U.S. federal funds effective rate underwent a dramatic reduction in early 2020 in response to the COVID-19 pandemic. The rate plummeted from 1.58 percent in February 2020 to 0.65 percent in March, and further decreased to 0.05 percent in April. This sharp reduction, accompanied by the Federal Reserve's quantitative easing program, was implemented to stabilize the economy during the global health crisis. After maintaining historically low rates for nearly two years, the Federal Reserve began a series of rate hikes in early 2022, with the rate moving from 0.33 percent in April 2022 to 5.33 percent in August 2023. The rate remained unchanged for over a year, before the Federal Reserve initiated its first rate cut in nearly three years in September 2024, bringing the rate to 5.13 percent. By December 2024, the rate was cut to 4.48 percent, signaling a shift in monetary policy in the second half of 2024. The first rate cut in 2025 then set the rate at 4.33 percent. What is the federal funds effective rate? The U.S. federal funds effective rate determines the interest rate paid by depository institutions, such as banks and credit unions, that lend reserve balances to other depository institutions overnight. Changing the effective rate in times of crisis is a common way to stimulate the economy, as it has a significant impact on the whole economy, such as economic growth, employment, and inflation. Central bank policy rates The adjustment of interest rates in response to the COVID-19 pandemic was a coordinated global effort. In early 2020, central banks worldwide implemented aggressive monetary easing policies to combat the economic crisis. The U.S. Federal Reserve's dramatic reduction of its federal funds rate - from 1.58 percent in February 2020 to 0.05 percent by April - mirrored similar actions taken by central banks globally. While these low rates remained in place throughout 2021, mounting inflationary pressures led to a synchronized tightening cycle beginning in 2022, with central banks pushing rates to multi-year highs. By mid-2024, as inflation moderated across major economies, central banks began implementing their first rate cuts in several years, with the U.S. Federal Reserve, Bank of England, and European Central Bank all easing monetary policy.