The benchmark interest rate in the United States was last recorded at 4.50 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.

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. In January 2025, the Federal Reserve implemented another cut, setting the rate at 4.33 percent, which remained unchanged throughout the following months. 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.

The inflation rate in the United States declined significantly between June 2022 and May 2025, despite rising inflationary pressures towards the end of 2024. The peak inflation rate was recorded in June 2022, at *** percent. In August 2023, the Federal Reserve's interest rate hit its highest level during the observed period, at **** percent, and remained unchanged until September 2024, when the Federal Reserve implemented its first rate cut since September 2021. By January 2025, the rate dropped to **** percent, signalling a shift in monetary policy. What is the Federal Reserve interest rate? The Federal Reserve interest rate, or the federal funds rate, is the rate at which banks and credit unions lend to and borrow from each other. It is one of the Federal Reserve's key tools for maintaining strong employment rates, stable prices, and reasonable interest rates. The rate is determined by the Federal Reserve and adjusted eight times a year, though it can be changed through emergency meetings during times of crisis. The Fed doesn't directly control the interest rate but sets a target rate. It then uses open market operations to influence rates toward this target. Ways of measuring inflation Inflation is typically measured using several methods, with the most common being the Consumer Price Index (CPI). The CPI tracks the price of a fixed basket of goods and services over time, providing a measure of the price changes consumers face. At the end of 2023, the CPI in the United States was ****** percent, up from ****** a year earlier. A more business-focused measure is the producer price index (PPI), which represents the costs of firms.

Graph and download economic data for Federal Funds Target Range - Upper Limit (DFEDTARU) from 2008-12-16 to 2025-07-20 about federal, interest rate, interest, rate, and USA.

The U.S. federal funds rate peaked in 2023 at its highest level since the 2007-08 financial crisis, reaching 5.33 percent by December 2023. A significant shift in monetary policy occurred in the second half of 2024, with the Federal Reserve implementing regular rate cuts. By December 2024, the rate had declined to 4.48 percent. What is a central bank rate? The federal funds rate determines the cost of overnight borrowing between banks, allowing them to maintain necessary cash reserves and ensure financial system liquidity. When this rate rises, banks become more inclined to hold rather than lend money, reducing the money supply. While this decreased lending slows economic activity, it helps control inflation by limiting the circulation of money in the economy. Historic perspective The federal funds rate historically follows cyclical patterns, falling during recessions and gradually rising during economic recoveries. Some central banks, notably the European Central Bank, went beyond traditional monetary policy by implementing both aggressive asset purchases and negative interest rates.

Graph and download economic data for FOMC Summary of Economic Projections for the Fed Funds Rate, Range, Midpoint (FEDTARRM) from 2025 to 2027 about projection, federal, rate, and USA.

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 December 2024, the United States had the highest 10-year government bond yield among developed economies at 4.59 percent, while Switzerland had the lowest at 0.27 percent. These rates serve as important benchmarks for borrowing costs and economic expectations worldwide.

View data of the Effective Federal Funds Rate, or the interest rate depository institutions charge each other for overnight loans of funds.

Effective Federal Funds Rate in the United States remained unchanged at 4.33 percent on Thursday July 17. This dataset includes a chart with historical data for the United States Effective Federal Funds Rate.

The benchmark interest rate in Japan was last recorded at 0.50 percent. This dataset provides - Japan Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

Graph and download economic data for Bank Prime Loan Rate Changes: Historical Dates of Changes and Rates (PRIME) from 1955-08-04 to 2024-12-20 about prime, loans, interest rate, banks, interest, depository institutions, rate, and USA.

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.

This research tests several hypotheses about the market's reactions to changes in the Federal Reserve's federal funds rate target and finds that short-term rates and long-term rates responded differently to funds rate target changes when target changes were accompanied by a change in the discount rate. It is shown that the smaller response of long-term rates (in these instances) is due to the market's revising its inflation outlook when the target is changed. No evidence that the size of the market's response varies with the size of the target changes is found, but the response to target changes is somewhat larger when the target change is the first change in a new direction. It should be noted that some of the results are based on a very small number of target changes.

Key information about United States Policy Rate

• United States cash rate (Policy Rate: Month End: Effective Federal Funds Rate) was set at 4.33 % pa in Feb 2025, compared with 4.33 % pa in the previous Jan 2025.
• US Policy Rate averaged 4.33 % pa and is updated monthly, available from Jul 1954 to Feb 2025.
• The data reached an all-time high of 22.00 % pa in Dec 1980 and a record low of 0.04 % pa in Dec 2011.

CEIC calculates the Policy Rate using the last day update of daily series 'Effective Federal Funds Rate (UDLAA)'.


Related information about United States Policy 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.
• Its Long Term Interest Rate (Treasury Notes Yield: Constant Maturity: Nominal: 10 Years) was reported at 4.45 % pa in Feb 2025.
• Its Real Effective Exchange Rate was 122.45 in Jan 2025.

The benchmark interest rate in Mexico was last recorded at 8 percent. This dataset provides - Mexico Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

Graph and download economic data for 10-Year Real Interest Rate (REAINTRATREARAT10Y) from Jan 1982 to Jul 2025 about 10-year, interest rate, interest, real, rate, and USA.

Key information about United States Short Term Interest Rate

• United States Short Term Interest Rate: Month End: Treasury Bills: 3 Months was reported at 4.20 % pa in Feb 2025, compared with 4.20 % pa in the previous month.
• US Short Term Interest Rate data is updated monthly, available from Jan 1954 to Feb 2025.
• The data reached an all-time high of 15.52 % pa in Aug 1981 and a record low of -0.01 % pa in Sep 2015.
• Short Term Interest Rate is reported by reported by Federal Reserve Board.

CEIC calculates monthly Short Term Interest Rate from daily Treasury Bills. Federal Reserve Board provides Treasury Bills. Short Term Interest Rate prior to December 1979 is sourced from the Federal Reserve Bank of St. Louis.


Related information about United States Short Term Interest Rate

• In the latest reports, US Treasury Notes Yield: Constant Maturity: Nominal: 10 Years was reported at 4.45 % pa in Feb 2025.
• The cash rate (Policy Rate: Month End: Effective Federal Funds Rate) was set at 4.33 % pa in Feb 2025.

The benchmark interest rate in Russia was last recorded at 20 percent. This dataset provides the latest reported value for - Russia Interest Rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.

The Federal Reserve (Fed) experienced an unprecedented shift in its financial performance, with its net income plummeting from 58.84 billion U.S. dollars in 2022 to negative 114.3 billion U.S. dollars in 2023 - an exceptionally sharp decrease. This negative net income in 2023 marked the lowest point in the observed period. In 2024, the net loss of the Fed increased but remained exceptionally low at negative 77.5 billion U.S. dollars. As the majority of the Fed's net income is typically remitted to the U.S. Treasury, these earnings remittances also saw a significant decline in 2024. This drastic decline in net income occurred because of the rapidly rising interest rates in 2023.

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.