Latest bank decision: At its meeting on 26 March, the Central Bank decided to cut the target for the overnight...
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
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| Federal Funds Target Rate (%, eop) | 0.25 | 4.50 | 5.50 | 4.50 | 3.75 |
| Secured Overnight Financing Rate (%, eop) | 0.05 | 4.30 | 5.38 | 4.49 | 3.85 |
| 10-Year Bond Yield (%, eop) | 1.52 | 3.88 | 3.88 | 4.58 | 4.12 |
Central Bank keeps rates steady in March
Latest bank decision: At its mid-March meeting, 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 last year.
Inflation uncertainty drives hold: The Fed decided not to continue cutting interest rates given inflation is still above the 2.0% target and that upside risks to the inflation outlook have risen due to the recent surge in energy prices. A wait-and-see approach was warranted given uncertainty over how long conflict in the Middle East—which has driven the surge in energy prices—will last.
More cuts are possible: The Fed’s own forecasts are for 25 basis points of cuts by the end of 2026, with our Consensus for slightly more aggressive monetary easing. However, risks are skewed towards no cuts due to high energy costs pushing up price pressures.
Panelist insight: TD Economics’ Thomas Feltmate said: “Provided the conflict in the Middle East is short lived, the drag on growth and hit to inflation is likely to be relatively small. But a more prolonged conflict that leads to higher oil prices and a more meaningful tightening in financial conditions raises the odds of a stagflationary type outcome (i.e., low growth, higher inflation). There's no way of knowing how this will play out, but by maintaining maximum flexibility, the Fed stands well positioned to respond to the dual-sided risks.”
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 54 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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Japan: Bank of Japan stands pat in March amid Iran war BOJ stands pat again: On 19 March, the Bank of Japan (BOJ) again decided by an eight-to-one vote to keep... -
Sweden: Riksbank stands pat as Middle East conflict fuels uncertainty Fourth straight hold anticipated by markets: On 19 March, the Riksbank opted for caution, keeping the policy rate unchanged at... -
Euro Area: ECB leaves rates unchanged in March The ECB stands still: On 18–19 March, the European Central Bank (ECB) kept its deposit rate at 2.00% for the... -
Canada: Bank of Canada holds rates in March Latest bank decision: At its meeting on 18 March, the Bank of Canada held the target for the overnight rate... -
Taiwan: Central Bank leaves rates unchanged in March Wait-and-see approach continues: At its meeting on 19 March, Taiwan’s Central Bank decided to keep the discount rate unchanged at...