The New York City skyline in the United States

United States Federal Funds Target Rate (%, eop)

United States Federal Funds Target Rate (%, eop)

Federal Funds Target Rate in United States

The US Federal Reserve's policy rates from 2013 to 2022 saw a cycle of hiking, lowering, and again hiking. Post-financial crisis, rates were kept near zero until 2015, when the Fed started gradual hikes as the economy improved. However, in response to the COVID-19 pandemic, rates were quickly cut back to near zero in 2020. By 2022, in the face of rising inflation, the Fed initiated a series of rate hikes, marking a significant shift towards tighter monetary policy.

The Federal Funds Target Rate ended 2022 at 4.50%, up from the 0.25% end-2021 value and from the reading of 0.25% a decade earlier. For reference, the average policy rate in Major Economies was 3.50% at end-2022. For more interest rate information, visit our dedicated page.

United States Interest Rate Chart

Note: This chart displays Policy Interest Rate (%) for United States from 2014 to 2024.
Source: Macrobond.

United States Interest Rate Data

2019 2020 2021 2022 2023
Federal Funds Target Rate (%, eop) 1.75 0.25 0.25 4.50 5.50
10-Year Bond Yield (%, eop) 1.92 0.93 1.52 3.88 3.88
Secured Overnight Financing Rate (%, eop) 1.55 0.07 0.05 4.30 5.38

Central Bank leaves rates unchanged in January

Latest bank decision: At its meeting on 29 January, the Central Bank decided to maintain the target range for the federal funds rate at 4.25–4.50%.

Monetary policy drivers: The key domestic factors influencing the Central Bank's decision to pause its easing cycle were likely a strong labor market; inflation moving further above the 2.0% target towards end-2024; and the threat of higher tariffs in the near term.

Policy outlook: The Central Bank’s forward guidance was data-dependent. Our Consensus is still for monetary easing to resume later this year. However, our panelists have revised up their forecasts since Trump’s election, and some now see rates on hold throughout 2025.

Panelist insight: Nomura analysts are among those adjusting their forecasts upwards: “Despite a largely dovish press conference, Powell downplayed the likelihood of a cut at the March meeting. We no longer see a March cut as a likely outcome. We now expect policy to remain on hold through 2025. Easing is likely to resume in 2026.” In contrast, Goldman Sachs analysts reiterated their call for cuts: “We remain comfortable with our standing forecast that the FOMC will deliver two more 25bp cuts in June and December this year and one more in 2026. Over the course of the next few FOMC meetings, we expect year-on-year core PCE inflation to fall meaningfully and in a way that builds [the] confidence that Powell said he wanted to see.”

Consensus Forecasts and Projections for the next ten years

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects American interest rate projections for the next ten years from a panel of 49 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for American interest rate.

Download one of our sample reports to visualize what a Consensus Forecast is and see our American interest rate projections.

Want to get access to the full dataset of American interest rate forecasts? Send an email to info@focus-economics.com.

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