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.

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 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.

The benchmark interest rate In the Euro Area was last recorded at 2.65 percent. This dataset provides - Euro Area Interest Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.

For many years prior to the global financial crisis, the Federal Open Market Committee set a target for the federal funds rate and achieved that target through small purchases and sales of securities in the open market. In the aftermath of the financial crisis, with a superabundant level of reserve balances in the banking system having been created as a result of the Federal Reserve's large-scale asset purchase programs, this approach to implementing monetary policy will no longer work. This paper provides a primer on the Fed's implementation of monetary policy. We use the standard textbook model to illustrate why the approach used by the Federal Reserve before the financial crisis to keep the federal funds rate near the Federal Open Market Committee's target will not work in current circumstances, and explain the approach that the Committee intends to use instead when it decides to begin raising short-term interest rates.

Key information about Georgia Policy Rate

• Georgia cash rate (Policy Rate: Month End) was set at 8.00 % pa in Feb 2025, compared with 8.00 % pa in the previous Jan 2025.
• Georgia Policy Rate averaged 7.25 % pa and is updated monthly, available from Jan 2008 to Feb 2025.
• The data reached an all-time high of 12.00 % pa in Jul 2008 and a record low of 3.75 % pa in Jan 2014.

Until August 20th, 2008, 7-day CD (Certificate of Deposit) rate was used as a Monetary Policy rate. Since then the, 7-day Refinancing Instrument has been introduced for conducting monetary policy operations.


Related information about Georgia Policy Rate

• In the latest reports, Georgia Short Term Interest Rate: Month Avg: Georgia: Certificates of Deposit: 3 Months was reported at 7.49 % pa in Jan 2025.
• Its Long Term Interest Rate (Long Term Interest Rate: Month Avg: Georgia: Treasury Note Yield) was reported at 8.74 % pa in Jan 2025.
• Georgia Exchange Rate against USD averaged 2.62 (USD/GEL) in Jun 2023.
• Its Real Effective Exchange Rate was 130.52 in Jan 2025.

From January 2022 to July 2024, a global trend emerged as almost all advanced and emerging economies increased their central bank policy rates. This widespread tightening of monetary policy was in response to inflationary pressures and economic challenges. However, a shift occurred in the latter half of 2024, with most countries beginning to lower their rates, potentially signaling a new phase in the global economic cycle and monetary policy approach.

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.

Key information about Uruguay Policy Rate

• Uruguay cash rate (Policy Rate: Month End: Overnight Monetary Policy Rate) was set at 9.00 % pa in Feb 2025, compared with 8.75 % pa in the previous Jan 2025.
• Uruguay Policy Rate averaged 9.25 % pa and is updated monthly, available from Sep 2007 to Feb 2025.
• The data reached an all-time high of 11.50 % pa in Mar 2023 and a record low of 4.50 % pa in Jul 2021.

Related information about Uruguay Policy Rate

• In the latest reports, Uruguay Short Term Interest Rates: Month End: Central Bank Bills: Peso: 3 Month was reported at 9.58 % pa in Feb 2025.
• Its Long Term Interest Rate (Long Term Interest Rate: Month End: Uruguay: Sovereign Debt Bond CUD Yield: 10 Years) was reported at 2.74 % pa in Jul 2021.
• Uruguay Exchange Rate against USD averaged 38.20 (USD/UYU) in Jun 2023.
• Its Real Effective Exchange Rate was 48.14 in Jan 2025.

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.

The benchmark interest rate in Seychelles was last recorded at 1.75 percent. This dataset provides the latest reported value for - Seychelles Average Prime Lending Rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.

The enduring discourse regarding the effectiveness of interest rate policy in mitigating inflation within developing economies is characterized by the interplay of structural and supply-side determinants. Moreover, extant academic literature fails to resolve the direction of causality between inflation and interest rates. Nevertheless, the prevalent adoption of interest rate-based monetary policies in numerous developing economies raises a fundamental inquiry: What motivates central banks in these nations to consistently espouse this strategy? To address this inquiry, our study leverages wavelet transformation to dissect interest rate and inflation data across a spectrum of frequency scales. This innovative methodology paves the way for a meticulous exploration of the intricate causal interplay between these pivotal macroeconomic variables for twenty-two developing economies using monthly data from 1992 to 2022. Traditional literature on causality tends to focus on short- and long-run timescales, yet our study posits that numerous uncharted time and frequency scales exist between these extremes. These intermediate scales may wield substantial influence over the causal relationship and its direction. Our research thus extends the boundaries of existing causality literature and presents fresh insights into the complexities of monetary policy in developing economies. Traditional wisdom suggests that central banks should raise interest rates to combat inflation. However, our study uncovers a contrasting reality in developing economies. It demonstrates a positive causal link between the policy rate and inflation, where an increase in the central bank’s interest rates leads to an upsurge in price levels. Paradoxically, in response to escalating prices, the central bank continues to heighten the policy rate, thereby perpetuating this cyclical pattern. Given this observed positive causal relationship in developing economies, central banks must explore structural and supply-side factors to break this cycle and regain control over inflation.

Key information about Italy Policy Rate

• Italy cash rate (Policy Rate: Month End: Main Refinancing Operations) was set at 2.90 % pa in Feb 2025, compared with 3.15 % pa in the previous Jan 2025.
• Italy Policy Rate averaged 1.25 % pa and is updated monthly, available from Jan 1999 to Feb 2025.
• The data reached an all-time high of 4.75 % pa in Apr 2001 and a record low of 0.00 % pa in Jun 2022.

Italy joined the Euro Area on January 1st, 1999, thus adopting the European Central Bank (ECB) monetary policy mechanisms.


Related information about Italy Policy Rate

• In the latest reports, Italy Short Term Interest Rate: Month End: EURIBOR: 3 Months was reported at -0.57 % pa in Nov 2021.
• Its Long Term Interest Rate (Long Term Interest Rate: Month Avg: Italy: ECB Harmonised ) was reported at 3.68 % pa in Jan 2025.
• Italy Exchange Rate against USD averaged 0.92 (USD/EUR) in Jun 2023.
• Its Real Effective Exchange Rate was 94.46 in Jun 2023.

Graph and download economic data for Federal Funds Target Range - Upper Limit (DFEDTARU) from 2008-12-16 to 2025-03-26 about federal, interest rate, interest, rate, and USA.

Graph and download economic data for Interest Rates, Discount Rate for Turkey (INTDSRTRM193N) from Jan 1964 to Jan 2025 about Turkey, interest rate, interest, and rate.

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.

Key information about Indonesia Policy Rate

• Indonesia cash rate (Policy Rate: Month End: Indonesia: BI-Rate) was set at 5.75 % pa in Feb 2025, compared with 5.75 % pa in the previous Jan 2025.
• Indonesia Policy Rate averaged 5.25 % pa and is updated monthly, available from Jun 2015 to Feb 2025.
• The data reached an all-time high of 6.25 % pa in Aug 2024 and a record low of 3.50 % pa in Jul 2022.

The Bank of Indonesia announced 7 Days Reverse Repo Rate as new policy rate effective August 19th, 2016. For Policy Rate prior to August 2016, please refer to the 1 Month Bank Indonesia Certificates Auction Rate. From 21 December 2023, Bank Indonesia will change the name of its policy rate to BI Rate, replacing the BI 7-Day Reverse Repo. The new name doesn't change the meaning or objectives of the BI-Rates as the monetary policy stance of Bank Indonesia, with operationalisation still referring to Bank Indonesia reverse repo transaction with a tenor of seven days. [COVID-19-IMPACT]


Related information about Indonesia Policy Rate

• In the latest reports, Indonesia Short Term Interest Rate: Month End: Indonesia: 3 Months Interbank was reported at 6.74 % pa in Jun 2023.
• Its Long Term Interest Rate (Long Term Interest Rate: Month End: Indonesia: Government Bond Yield: 10 Years) was reported at 6.93 % pa in Feb 2025.
• Indonesia Exchange Rate against USD averaged 14,932.00 (USD/IDR) in Jun 2023.
• Its Real Effective Exchange Rate was 111.62 in Jan 2025.

Throughout 2022, central bank benchmark interest rates were hiked in most Asia-Pacific countries and territories. The State Bank of Pakistan set the highest interest rate in the region throughout the year, raising it from 9.75 percent in January to 15 percent as of October 2022. September 2022 saw the central banks of all Southeast Asian economies as well as India and Taiwan raise benchmark interest rates in order to curb inflation.

The aim of this study is to investigate the effects of monetary policy on financial asset prices in Poland. Following Gürkaynak et al. (2005) I test how many factors adequately explain the variability of short-term interest rates around MPC meetings, finding that there are two such factors. The first one has a structural interpretation as a “current interest rate change” factor, and the second one as a “future interest rate changes” factor, with the latter related to MPC communication. Regression analysis shows that, controlling for foreign interest rates and global risk aversion, both MPC actions and communication matter for government bond yields, and that communication is more important for stock prices. Furthermore, the foreign exchange rate used to depreciate (appreciate) after MPC statements signalling tighter (easier) future monetary policy. However, the effect disappeared at the end of the sample. For most of the sample the exchange rate would appreciate (depreciate) or would not change in a statistically significant manner after an increase (a decrease) of the current interest rate. The results indicate that not only changes of the current interest rate but also MPC communication matters for financial asset prices in Poland. It has important implications for the conduct of monetary policy, especially in a low inflation and low interest rate environment.

Key information about Germany Policy Rate

• Germany cash rate (Policy Rate: Month End: Main Refinancing Operations) was set at 2.90 % pa in Feb 2025, compared with 3.15 % pa in the previous Jan 2025.
• Germany Policy Rate averaged 1.25 % pa and is updated monthly, available from Jan 1999 to Feb 2025.
• The data reached an all-time high of 4.75 % pa in Apr 2001 and a record low of 0.00 % pa in Jun 2022.

Related information about Germany Policy Rate

• In the latest reports, Germany Short Term Interest Rate: Month End: EURIBOR: 3 Months was reported at -0.57 % pa in Nov 2021.
• Its Long Term Interest Rate (Long Term Interest Rate: Month Avg: Germany: ECB Harmonised ) was reported at 2.18 % pa in Dec 2024.
• Germany Exchange Rate against USD averaged 0.92 (USD/EUR) in Jun 2023.
• Its Real Effective Exchange Rate was 93.96 in Jan 2025.