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.
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Shows the daily level of the federal funds rate back to 1954. The fed funds rate is the interest rate at which depository institutions (banks and credit unions) lend reserve balances to other depository institutions overnight, on an uncollateralized basis. The Federal Open Market Committee (FOMC) meets eight times a year to determine the federal funds target rate.
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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.
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Daily Federal Funds Rate from 1928-1954 (https://fred.stlouisfed.org/categories/33951).
The federal funds rate is the interest rate at which depository institutions trade federal funds (balances held at Federal Reserve Banks) with each other overnight. When a depository institution has surplus balances in its reserve account, it lends to other banks in need of larger balances. In simpler terms, a bank with excess cash, which is often referred to as liquidity, will lend to another bank that needs to quickly raise liquidity. (1) The rate that the borrowing institution pays to the lending institution is determined between the two banks; the weighted average rate for all of these types of negotiations is called the effective federal funds rate.(2) The effective federal funds rate is essentially determined by the market but is influenced by the Federal Reserve through open market operations to reach the federal funds rate target.(2) The Federal Open Market Committee (FOMC) meets eight times a year to determine the federal funds target rate. As previously stated, this rate influences the effective federal funds rate through open market operations or by buying and selling of government bonds (government debt).(2) More specifically, the Federal Reserve decreases liquidity by selling government bonds, thereby raising the federal funds rate because banks have less liquidity to trade with other banks. Similarly, the Federal Reserve can increase liquidity by buying government bonds, decreasing the federal funds rate because banks have excess liquidity for trade. Whether the Federal Reserve wants to buy or sell bonds depends on the state of the economy. If the FOMC believes the economy is growing too fast and inflation pressures are inconsistent with the dual mandate of the Federal Reserve, the Committee may set a higher federal funds rate target to temper economic activity. In the opposing scenario, the FOMC may set a lower federal funds rate target to spur greater economic activity. Therefore, the FOMC must observe the current state of the economy to determine the best course of monetary policy that will maximize economic growth while adhering to the dual mandate set forth by Congress. In making its monetary policy decisions, the FOMC considers a wealth of economic data, such as: trends in prices and wages, employment, consumer spending and income, business investments, and foreign exchange markets. The federal funds rate is the central interest rate in the U.S. financial market. It influences other interest rates such as the prime rate, which is the rate banks charge their customers with higher credit ratings. Additionally, the federal funds rate indirectly influences longer- term interest rates such as mortgages, loans, and savings, all of which are very important to consumer wealth and confidence.(2) References (1) Federal Reserve Bank of New York. "Federal funds." Fedpoints, August 2007. (2) Board of Governors of the Federal Reserve System. "Monetary Policy (https://www.federalreserve.gov/monetarypolicy.htm)".
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The Federal Reserve's balance sheet has undergone significant changes since 2007, reflecting its response to major economic crises. From a modest *** trillion U.S. dollars at the end of 2007, it ballooned to approximately **** trillion U.S. dollars by May 2025. This dramatic expansion, particularly during the 2008 financial crisis and the COVID-19 pandemic - both of which resulted in negative annual GDP growth in the U.S. - showcases the Fed's crucial role in stabilizing the economy through expansionary monetary policies. Impact on inflation and interest rates The Fed's expansionary measures, while aimed at stimulating economic growth, have had notable effects on inflation and interest rates. Following the quantitative easing in 2020, inflation in the United States reached * percent in 2022, the highest since 1991. However, by *************, inflation had declined to *** percent. Concurrently, the Federal Reserve implemented a series of interest rate hikes, with the rate peaking at **** percent in ***********, before the first rate cut since ************** occurred in **************. Financial implications for the Federal Reserve The expansion of the Fed's balance sheet and subsequent interest rate hikes have had significant financial implications. In 2023, the Fed reported a negative net income of ***** billion U.S. dollars, a stark contrast to the ***** billion U.S. dollars profit in 2022. This unprecedented shift was primarily due to rapidly rising interest rates, which caused the Fed's interest expenses to soar to over *** billion U.S. dollars in 2023. Despite this, the Fed's net interest income on securities acquired through open market operations reached a record high of ****** billion U.S. dollars in the same year.
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Effective Federal Funds Rate in the United States remained unchanged at 4.33 percent on Wednesday June 18. This dataset includes a chart with historical data for the United States Effective Federal Funds Rate.
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Graph and download economic data for 10-Year Real Interest Rate (REAINTRATREARAT10Y) from Jan 1982 to Jun 2025 about 10-year, interest rate, interest, real, 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.
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The benchmark interest rate in Canada was last recorded at 2.75 percent. This dataset provides - Canada Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.
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Graph and download economic data for Personal Saving Rate (PSAVERT) from Jan 1959 to May 2025 about savings, personal, rate, and USA.
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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.
The Federal Reserve's balance sheet ballooned following its announcement to carry out quantitative easing to increase the liquidity of U.S. banks in early 2020. The balance sheet continued to grow in the following period as well, with a downward trend in 2023. As of February 29, 2024, the Fed's balance sheet amounted to roughly 7.6 trillion U.S. dollars. The most drastic increase in the observed period took place in the first half of 2020. This measure was taken to increase the money supply and stimulate economic growth in the wake of the damage caused by the COVID-19 pandemic. The Federal Reserve was not the only institution that implemented an expansionary monetary policy in response to the pandemic. For instance, the European Central Bank expanded its money supply in March 2020 and kept doing so over the following months. How do central banks increase the amount of money in circulation? Central banks can increase the money circulating in the economy in many ways. For instance, they can decrease banks’ reserve requirements to stimulate lending or decrease the interest rates to reduce the cost of borrowing for commercial banks. Alternatively, central banks can engage in open market operations (OMO) and buy securities such as government bonds from commercial banks or institutions. By conducting open market operations, the Federal Reserve expanded its balance sheet by seven trillion U.S. dollars between 2007 and 2023. All these measures aim to increase bank loans to entrepreneurs and consumers in order to stimulate employment and economic growth. Impact of COVID-19 on the U.S. economy The COVID-19 pandemic had a tremendous impact on national economies worldwide, and the United States was no exception. During the early months of the crisis, many lost their jobs, mostly those in lower-income categories. As a consequence, many Americans found it difficult to pay their rent and cover basic household expenses. Furthermore, in April 2022, most small business owners claimed that the pandemic had a large or moderate negative effect on their businesses. Overall, the gross domestic product (GDP) of the United States decreased by roughly 2.2 percent in 2020. In the following years, however, it increased notably, surpassing 25 trillion U.S. dollars in 2022.
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United States - Other Separations: Federal was 0.80000 Rate in April of 2025, according to the United States Federal Reserve. Historically, United States - Other Separations: Federal reached a record high of 1.20000 in September of 2007 and a record low of 0.10000 in February of 2009. Trading Economics provides the current actual value, an historical data chart and related indicators for United States - Other Separations: Federal - last updated from the United States Federal Reserve on June of 2025.
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United States - Weighted-Average Effective Loan Rate by Time that Pricing Terms Were Set and by Commitment, During Survey Week, Informal Commitment, All Commercial Banks (DISCONTINUED) was 3.27% in April of 2017, according to the United States Federal Reserve. Historically, United States - Weighted-Average Effective Loan Rate by Time that Pricing Terms Were Set and by Commitment, During Survey Week, Informal Commitment, All Commercial Banks (DISCONTINUED) reached a record high of 6.89 in July of 2007 and a record low of 0.76 in April of 2013. Trading Economics provides the current actual value, an historical data chart and related indicators for United States - Weighted-Average Effective Loan Rate by Time that Pricing Terms Were Set and by Commitment, During Survey Week, Informal Commitment, All Commercial Banks (DISCONTINUED) - last updated from the United States Federal Reserve on May of 2025.
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United States - Contributions to percent change in real government consumption expenditures and gross investment: Federal: Income security was -0.04000 Percentage Points at Annual Rate in January of 2023, according to the United States Federal Reserve. Historically, United States - Contributions to percent change in real government consumption expenditures and gross investment: Federal: Income security reached a record high of 0.27000 in January of 1974 and a record low of -0.29000 in January of 2007. Trading Economics provides the current actual value, an historical data chart and related indicators for United States - Contributions to percent change in real government consumption expenditures and gross investment: Federal: Income security - last updated from the United States Federal Reserve on June of 2025.
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United States - Total Value of Loans by Base Pricing Rate, Other, Small Domestic Banks (DISCONTINUED) was 1658.00000 Mil. of $ in April of 2017, according to the United States Federal Reserve. Historically, United States - Total Value of Loans by Base Pricing Rate, Other, Small Domestic Banks (DISCONTINUED) reached a record high of 3963.00000 in July of 2007 and a record low of 1070.00000 in October of 2002. Trading Economics provides the current actual value, an historical data chart and related indicators for United States - Total Value of Loans by Base Pricing Rate, Other, Small Domestic Banks (DISCONTINUED) - last updated from the United States Federal Reserve on June of 2025.
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Unemployment Rate: Aged 15-64: Males for the OECD Total Area (DISCONTINUED) was 5.90% in April of 2017, according to the United States Federal Reserve. Historically, Unemployment Rate: Aged 15-64: Males for the OECD Total Area (DISCONTINUED) reached a record high of 9.00 in October of 2009 and a record low of 5.50 in April of 2007. Trading Economics provides the current actual value, an historical data chart and related indicators for Unemployment Rate: Aged 15-64: Males for the OECD Total Area (DISCONTINUED) - last updated from the United States Federal Reserve on June of 2025.
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Homeownership Rate for the District of Columbia was 40.10% in January of 2024, according to the United States Federal Reserve. Historically, Homeownership Rate for the District of Columbia reached a record high of 47.20 in January of 2007 and a record low of 34.60 in January of 1986. Trading Economics provides the current actual value, an historical data chart and related indicators for Homeownership Rate for the District of Columbia - last updated from the United States Federal Reserve on June of 2025.
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Employment Rate: Aged 15-24: All Persons for the OECD Total Area (DISCONTINUED) was 41.20% in April of 2017, according to the United States Federal Reserve. Historically, Employment Rate: Aged 15-24: All Persons for the OECD Total Area (DISCONTINUED) reached a record high of 43.10 in January of 2007 and a record low of 38.80 in October of 2010. Trading Economics provides the current actual value, an historical data chart and related indicators for Employment Rate: Aged 15-24: All Persons for the OECD Total Area (DISCONTINUED) - last updated from the United States Federal Reserve on June of 2025.
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.