Contrary to popular belief, federal funds futures rates do not tell us precisely where the market thinks federal funds rates will be in the future. On average, futures rates overpredict future fed funds rates, and, depending on whether fed funds rates are falling or rising, the futures rate may consistently overestimate or underestimate the future fed funds rates. To obtain a reliable estimate of the future fed funds rate, one must adjust the fed funds futures rate appropriately to account for the bias and past movements of the fed funds rate.

Graph and download economic data for FOMC Summary of Economic Projections for the Fed Funds Rate, Median (FEDTARMD) from 2025 to 2028 about projection, federal, median, rate, and USA.

Events rarely unfold exactly as we foresee them. In the monetary policy arena, for example, the timing and intensity of specific actions can be difficult to anticipate. Following a 15-month period during which no policy action was taken, the Federal Open Market Committee (FOMC), the central bank’s policymaking arm, embarked on a series of moves that has raised money market interest rates seven times since January 1994.

The benchmark interest rate in the United States was last recorded at 4 percent. This dataset provides the latest reported value for - United States Fed Funds Rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.

Dataset Description

This dataset contains the actual and predicted federal funds target rate for the United States from 1990 to 2023. The federal funds target rate is the interest rate at which depository institutions lend their excess reserves to each other overnight. It is set by the Federal Open Market Committee (FOMC) and is a key tool used by the Federal Reserve to influence the economy.

The dataset includes the following five columns:

Release Date: The date on which the data was released by the Federal Reserve. Time: The time of day at which the data was released. Actual: The actual federal funds target rate. Predicted: The predicted federal funds target rate. Forecast: The forecast federal funds target rate.

Data Usage

This dataset can be used for a variety of purposes, including: - Analyzing trends in the federal funds target rate over time. - Forecasting the future path of the federal funds target rate. - Assessing the effectiveness of monetary policy. - Data Quality

The data for this dataset is of high quality. The Federal Reserve is a reputable source of data and the data is updated regularly.

Data Limitations

The data for this dataset is limited to the United States. Additionally, the data does not include information on the factors that influenced the Federal Open Market Committee's decision to set the federal funds target rate.

This paper demonstrates how options on federal funds futures, which began trading in March 2003, can be used to recover the implied probability density function (PDF) for future Federal Open Market Committee (FOMC) interest rate outcomes. The discrete nature of the choices made by the FOMC allows for a very straightforward recovery of the implied PDF using ordinary least squares (OLS) estimation. This simple recovery method stands in contrast to the relatively complicated PDF recovery techniques developed for options written on assets such as equities, foreign exchange, or commodity futures where the underlying prices are most appropriately modeled as being drawn from continuous distributions. The OLS estimation is used to recover PDFs for single FOMC meetings as well as PDFs for joint estimation of multiple FOMC meetings, and allows for the imposition of restrictions on the recovered probabilities, both within and across FOMC meetings. Finally, recovered probabilities are used to assess the impact of data releases and Fed communication on the perceived likelihood of actual policy outcomes.

This paper constructs daily measures of the real interest rate and expected inflation using commodity futures prices and the term structure of Treasury yields. We find that commodity futures markets respond to surprise increases in the federal funds rate target by raising the inflation rate expected over the next three to nine months. There is no evidence that the real interest rate responds to surprises in the federal funds target. The data from the commodity futures markets are highly volatile. We show that one can substantially reduce the noise using limited information estimators such as the median change. Nevertheless, the basket of commodities actually traded daily is quite narrow and we do not know whether our observable rates are closely connected to the unobservable inflation and real rates that affect economy-wide consumption and investment decisions.

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The data show what are basically frequency distributions of interest rate projections by members of the Federal Open Market Committee (FOMC). The twelve FOMC members vote on (and determine) the federal funds rate, but they also give their projections for future federal funds rates. The projections fall into the ranges given in the first column. Then the projection counts are tallied by current and future FOMC meeting months.

The following is from the Fed FOMC member projections website: https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20230920.htm

Each participant's projections are based on his or her assessment of appropriate monetary policy. Longer-run projections represent each participant's assessment of the rate to which each variable would be expected to converge under appropriate monetary policy and in the absence of further shocks to the economy. The projections for the federal funds rate are the value of the midpoint of the projected appropriate target range for the federal funds rate or the projected appropriate target level for the federal funds rate at the end of the specified calendar year or over the longer run.

Strong returns in various financial markets and increased trading volumes have benefited businesses in the industry. Companies provide underwriting, brokering and market-making services for different financial instruments, including bonds, stocks and derivatives. Businesses benefited from improving macroeconomic conditions despite the high-interest-rate environment for most of the period due to inflationary pressures. However, the anticipation of interest rate cuts in the current year can limit interest income from fixed-income securities. As interest rates fall, fixed income securities will experience an outflow of capital and equities will experience an inflow of funds. The Fed is monitoring inflation, employment figures and the effects of tariffs along with other economic factors before making rate cut decisions. Overall, revenue has been growing at a CAGR of 8.5% to $491.0 billion over the past five years, including an expected increase of 1.8% in 2025 alone. Industry profit has grown during the same time due to greater interest income from bonds and will comprise 16.2% of revenue in the current year. While many industries struggled at the onset of the period due to economic disruptions stemming from the volatile economic environment and supply chain issues, businesses benefited from the volatility. Primarily, companies have benefited from increased trading activity on behalf of their clients due to fluctuations in asset prices. This has led to higher trade execution fees for firms at the onset of the period. Similarly, debt underwriting increased as many businesses have turned to investment bankers to help raise cash for various ventures. Also, improved scalability of operations, especially regarding trading services conducted by securities intermediaries, has helped increase industry profits. Structural changes have forced the industry's smaller businesses to evolve. Because competing in trading services requires massive investments in technology and compliance, boutique investment banks have alternatively focused on advising in merger and acquisition (M&A) activity. Boutique investment banks' total share of M&A revenue is forecast to grow through the end of 2030. Furthermore, the industry will benefit from improved macroeconomic conditions as inflationary pressures are expected to ease. This will help asset values rise and interest rate levels to be cut, thus allowing operators to generate more from equity underwriting and lending activities. Overall, revenue is forecast to grow at a CAGR of 1.4% to $526.8 billion over the five years to 2030.

The benchmark interest rate in Canada was last recorded at 2.25 percent. This dataset provides - Canada Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

The benchmark interest rate In the Euro Area was last recorded at 2.15 percent. This dataset provides - Euro Area Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

The benchmark interest rate in the United Kingdom was last recorded at 4 percent. This dataset provides - United Kingdom Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

The benchmark interest rate in Brazil was last recorded at 15 percent. This dataset provides - Brazil Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

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