A unanimous vote: On 6 February, the monetary policy committee of the Reserve Bank of India (RBI) voted unanimously to...
Federal Funds Target Rate in United States
The US Federal Reserve's policy rates over the last decade saw cycles of hiking and lowering. 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 bank then reversed course in 2024, cutting rates as inflation declined.
The federal funds target rate ended 2024 at 4.50%, compared to the end-2023 value of 5.50% and the figure a decade earlier of 0.25%. It averaged 2.02% over the last decade. 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 2025.
Source: Macrobond.
United States Interest Rate Data
| 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|
| Federal Funds Target Rate (%, eop) | 0.25 | 0.25 | 4.50 | 5.50 | 4.50 |
| Secured Overnight Financing Rate (%, eop) | 0.07 | 0.05 | 4.30 | 5.38 | 4.49 |
| 10-Year Bond Yield (%, eop) | 0.93 | 1.52 | 3.88 | 3.88 | 4.58 |
Central Bank keeps rates steady in January
Latest bank decision: At its meeting ending on 28 January, the Central Bank kept the target range for the federal funds rate at 3.50–3.75%, following 75 basis points of rate cuts from August to December.
Strong economy underpins hold: The Fed felt in little rush to cut rates further given that the economy is expanding robustly and the unemployment rate has stabilized somewhat. On the flipside, there was no need to hike rates given that inflation appears to have topped out at 3% and has declined in the past few months.
More cuts to come: Our Consensus is for two further 25 basis-point cuts to the federal funds rate by end-2026, with forecasts ranging from 125 basis points of reductions to the Bank on hold. Much will depend on whether the Trump administration is able to exercise greater control over the Fed going forward, including by nominating a new governor after Jerome Powell’s term ends in May 2026.
Panelist insight: On the outlook, Desjardins’ Francis Généreux said: “The Fed judges that its current monetary policy stance is “in a good place”. We share this view. We do not anticipate any rate movements before the second half of 2026. At that point, the Fed could bring the federal funds rate somewhat closer to the middle of the estimated neutral range.” Nomura analysts concurred: “We continue to expect no additional cuts under the Powell-led Fed, with 25bp cuts in June and September under Powell’s successor.”
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 53 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.
Latest Global Monetary Policy News
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