In 2026, the federal funds effective rate continued its downward adjustment as the Federal Reserve advanced its policy easing cycle. After the beginning of 2025 at **** percent following a January rate cut, the rate remained unchanged until September 2025, when it was reduced to **** percent. Additional easing followed late in the year, with the rate lowered to **** percent in November and further reduced to **** percent in December, reflecting a sustained shift toward accommodative monetary policy. This phase of rate reductions followed a prolonged period of elevated interest rates that began after the COVID-19 pandemic. In early 2020, the federal funds effective rate was sharply reduced in response to the economic shock caused by the pandemic, falling from **** percent in February 2020 to **** percent in March and reaching **** percent by April. These emergency cuts, combined with the quantitative easing program, were designed to stabilize financial markets and support economic activity. The rate remained near zero for nearly two years before the Federal Reserve initiated a tightening cycle in early 2022, raising the rate from **** percent in April 2022 to a peak of **** percent in August 2023. After holding rates steady for more than a year, the Federal Reserve began reversing course in September 2024, cutting the rate to **** percent, followed by a further reduction to **** percent in December 2024, marking the start of a broader policy pivot that continued through 2025 and into 2026, reaching **** percent in February 2026. 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 Interest rate adjustments following the COVID-19 pandemic reflected a largely coordinated global response. In early 2020, central banks worldwide adopted aggressive monetary easing to counter the economic shock, with the Federal Reserve cutting the federal funds rate from **** percent in February to **** percent by April, in line with actions taken globally. After rates remained near zero through 2021, rising inflation triggered a synchronized tightening cycle beginning in 2022. As inflation moderated, central banks - including the Federal Reserve, the Bank of England, and the European Central Bank - began cutting rates in mid-2024. This shift toward easing broadened in 2025, with interest rates reduced in most countries.

The benchmark interest rate in the United States was last recorded at 3.75 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.

Graph and download economic data for FOMC Summary of Economic Projections for the Fed Funds Rate, Median (FEDTARMD) from 2026 to 2028 about projection, federal, median, rate, and USA.

Graph and download economic data for Federal Funds Target Range - Upper Limit (DFEDTARU) from 2008-12-16 to 2026-03-28 about federal, interest rate, interest, rate, and USA.

The inflation rate in the United States declined significantly between June 2022 and October 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 February 2026, the rate dropped to **** percent. 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. By mid 2024, 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.

View market daily updates and historical trends for Effective Federal Funds Rate. from United States. Source: Federal Reserve. Track economic data with YC…

The U.S. federal funds rate reached its peak in 2023, climbing to **** percent by December - its highest level since the 2007-08 financial crisis - following an aggressive tightening cycle aimed at curbing elevated inflation. A clear shift in monetary policy emerged in the second half of 2024, when the Federal Reserve began implementing a series of rate cuts as inflationary pressures eased and economic growth moderated. By December 2024, the federal funds rate had declined to **** percent. This easing cycle continued into 2025, with additional rate reductions throughout the year, bringing the rate below **** percent by year-end and signaling a sustained move toward a more accommodative policy stance. 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. Historical 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.

The benchmark interest rate in India was last recorded at 5.25 percent. This dataset provides - India Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

Graph and download economic data for Federal Funds Target Range - Lower Limit (DFEDTARL) from 2008-12-16 to 2026-03-19 about federal, interest rate, interest, rate, and USA.

The benchmark interest rate in the United Kingdom was last recorded at 3.75 percent. This dataset provides - United Kingdom Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

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.

Graph and download economic data for Interest Rate on Reserve Balances (IORB Rate) (IORB) from 2021-07-29 to 2026-03-20 about reserves, interest rate, interest, rate, and USA.

In January 2026, 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 2025. In January 2026, Russia maintained the highest interest rate at ** percent, while Japan retained the lowest at **** percent. Varied inflation rates across major economies The inflation landscape varies considerably among major economies. Sweden had the lowest inflation rate at *** percent in October 2023. In contrast, Russia maintained a high inflation rate of *** percent. These figures align with broader trends observed in late 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 **** percent in September 2019 to *** 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 2024 and 2025.

The benchmark interest rate in Japan was last recorded at 0.75 percent. This dataset provides - Japan Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

Graph and download economic data for Longer Run FOMC Summary of Economic Projections for the Fed Funds Rate, Range, Midpoint (FEDTARRMLR) from 2015-06-17 to 2026-03-18 about projection, federal, rate, and USA.

The benchmark interest rate in Indonesia was last recorded at 4.75 percent. This dataset provides - Indonesia Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

The Federal Reserve Bank of Cleveland provides daily “nowcasts” of inflation for two popular price indexes, the price index for personal consumption expenditures (PCE) and the Consumer Price Index (CPI). These nowcasts give a sense of where inflation is today. Released each business day.

Effective Federal Funds Rate in the United States remained unchanged at 3.64 percent on Wednesday March 25. This dataset includes a chart with historical data for the United States Effective Federal Funds Rate.

The Volcker Shock was a period of historically high interest rates precipitated by Federal Reserve Chairperson Paul Volcker's decision to raise the central bank's key interest rate, the Fed funds effective rate, during the first three years of his term. Volcker was appointed chairperson of the Fed in August 1979 by President Jimmy Carter, as replacement for William Miller, who Carter had made his treasury secretary. Volcker was one of the most hawkish (supportive of tighter monetary policy to stem inflation) members of the Federal Reserve's committee, and quickly set about changing the course of monetary policy in the U.S. in order to quell inflation. The Volcker Shock is remembered for bringing an end to over a decade of high inflation in the United States, prompting a deep recession and high unemployment, and for spurring on debt defaults among developing countries in Latin America who had borrowed in U.S. dollars.

Monetary tightening and the recessions of the early '80s

Beginning in October 1979, Volcker's Fed tightened monetary policy by raising interest rates. This decision had the effect of depressing demand and slowing down the U.S. economy, as credit became more expensive for households and businesses. The Fed funds rate, the key overnight rate at which banks lend their excess reserves to each other, rose as high as 17.6 percent in early 1980. The rate was allowed to fall back below 10 percent following this first peak, however, due to worries that inflation was not falling fast enough, a second cycle of monetary tightening was embarked upon starting in August of 1980. The rate would reach its all-time peak in June of 1981, at 19.1 percent. The second recession sparked by these hikes was far deeper than the 1980 recession, with unemployment peaking at 10.8 percent in December 1980, the highest level since The Great Depression. This recession would drive inflation to a low point during Volcker's terms of 2.5 percent in August 1983.

The legacy of the Volcker Shock

By the end of Volcker's terms as Fed Chair, inflation was at a manageable rate of around four percent, while unemployment had fallen under six percent, as the economy grew and business confidence returned. While supporters of Volcker's actions point to these numbers as proof of the efficacy of his actions, critics have claimed that there were less harmful ways that inflation could have been brought under control. The recessions of the early 1980s are cited as accelerating deindustrialization in the U.S., as manufacturing jobs lost in 'rust belt' states such as Michigan, Ohio, and Pennsylvania never returned during the years of recovery. The Volcker Shock was also a driving factor behind the Latin American debt crises of the 1980s, as governments in the region defaulted on debts which they had incurred in U.S. dollars. Debates about the validity of using interest rate hikes to get inflation under control have recently re-emerged due to the inflationary pressures facing the U.S. following the Coronavirus pandemic and the Federal Reserve's subsequent decision to embark on a course of monetary tightening.

The Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS) surveys up to 80 large domestic banks and 24 U.S. branches and agencies of foreign banks. The Federal Reserve generally conducts the survey quarterly, timing it so that results are available for the January/February, April/May, August, and October/November meetings of the Federal Open Market Committee (FOMC). The Federal Reserve occasionally conducts one or two additional surveys during the year. Questions cover changes in the standards and terms of the banks' lending and the state of business and household demand for loans. The survey often includes questions on other topics of current interest. The survey results are released on Mondays after the FOMC meeting.