The Federal Reserve lowered the target range for the federal funds rate to 1.75-2 percent during its September meeting, the second rate cut since the financial crisis, as inflation remains subdued amid heightened concerns about the economic outlook and ongoing trade tensions with China. Interest Rate in the United States averaged 5.65 percent from 1971 until 2019, reaching an all time high of 20 percent in March of 1980 and a record low of 0.25 percent in December of 2008.

Interest Rate in the United States is expected to be 1.75 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in the United States to stand at 1.50 in 12 months time. In the long-term, the United States Fed Funds Rate is projected to trend around 2.00 percent in 2020, according to our econometric models.

United States Fed Funds Rate
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Calendar GMT Actual Previous Consensus TEForecast
2019-05-01 06:00 PM Fed Interest Rate Decision 2.5% 2.5% 2.5% 2.5%
2019-06-19 06:00 PM Fed Interest Rate Decision 2.5% 2.5% 2.5% 2.5%
2019-07-31 06:00 PM Fed Interest Rate Decision 2.25% 2.5% 2.25% 2.25%
2019-09-18 06:00 PM Fed Interest Rate Decision 2% 2.25% 2% 2%
2019-10-15 01:00 PM Fed Bostic Speech
2019-10-15 07:30 PM Fed Daly Speech
2019-10-16 01:00 PM Fed Evans Speech

Fed Officials Divided on Next Policy Moves

Most Fed policymakers viewed their interest-rate cut as necessary but were increasingly divided on the next monetary policy steps, amid concerns about escalating trade wars, particularly with China, slowing global growth and other developments such as Brexit, minutes of the September meeting showed. Participants agreed that policy was not on a preset course and would depend on the economic outlook.

Excerpts from the minutes of the Federal Open Market Committee, September 17–18, 2019:

In their consideration of the monetary policy options at this meeting, most participants believed that a reduction of 25 basis points in the target range for the federal funds rate would be appropriate. In discussing the reasons for such a decision, these participants pointed to considerations related to the economic outlook, risk management, and the need to center inflation and inflation expectations on the Committee's longer-run objective of 2 percent.

Several participants favored maintaining the existing target range for the federal funds rate at this meeting. These participants suggested that the baseline projection for the economy had changed very little since the Committee's previous meeting and that the state of the economy and the economic outlook did not justify a shift away from the current policy stance, which they felt was already adequately accommodative. They acknowledged the uncertainties that currently figured importantly in evaluations of the economic outlook, but they contended that the key uncertainties were unlikely to be resolved soon. Furthermore, as they did not believe that these uncertainties would derail the expansion, they did not see further policy accommodation as needed at this time.

A couple of participants indicated their preference for a 50 basis point cut in the federal funds rate at this meeting. These participants suggested that a larger policy move would help reduce the risk of an economic downturn and would more appropriately recognize important recent developments, such as slowing job gains, weakening investment, and continued low values of market-based measures of inflation compensation. In addition, these participants stressed the need for a policy stance—possibly one using enhanced forward guidance—that was sufficiently accommodative to make it unlikely that the United States would experience a protracted period of the kind seen abroad in which the economy became mired in a combination of undesirably low inflation, weak economic activity, and near-zero policy rates.

With regard to monetary policy beyond this meeting, participants agreed that policy was not on a preset course and would depend on the implications of incoming information for the evolution of the economic outlook. A few participants judged that the expectations regarding the path of the federal funds rate implied by prices in financial markets were currently suggesting greater provision of accommodation at coming meetings than they saw as appropriate and that it might become necessary for the Committee to seek a better alignment of market expectations regarding the policy rate path with policymakers' own expectations for that path. Several participants suggested that the Committee's postmeeting statement should provide more clarity about when the recalibration of the level of the policy rate in response to trade uncertainty would likely come to an end.

Federal Reserve | Joana Ferreira |
10/9/2019 6:19:06 PM

United States Money Last Previous Highest Lowest Unit
Interest Rate 2.00 2.25 20.00 0.25 percent [+]
Money Supply M0 3202694.00 3271409.00 4075039.00 48362.00 USD Million [+]
Money Supply M1 3900.80 3839.50 3900.80 138.90 USD Billion [+]
Interbank Rate 2.00 2.00 10.63 0.22 percent [+]
Money Supply M2 15060.80 14952.80 15060.80 286.60 USD Billion [+]
Central Bank Balance Sheet 3892425.00 3808515.00 4473864.00 672444.00 USD Million [+]
Banks Balance Sheet 17429973.00 17398273.00 17532648.00 697581.70 USD Million [+]
Foreign Exchange Reserves 128526.00 128845.00 153075.00 12128.00 USD Million [+]
Loans to Private Sector 2353.63 2363.08 2363.08 13.65 USD Billion [+]
Foreign Bond Investment 10954.00 -7710.00 118012.00 -77351.00 USD Million [+]
Private Debt to GDP 196.70 201.80 212.90 156.20 percent [+]
Repo Rate 1.92 1.91 6.94 -0.01 [+]

United States Fed Funds Rate

In the United States, the authority to set interest rates is divided between the Board of Governors of the Federal Reserve (Board) and the Federal Open Market Committee (FOMC). The Board decides on changes in discount rates after recommendations submitted by one or more of the regional Federal Reserve Banks. The FOMC decides on open market operations, including the desired levels of central bank money or the desired federal funds market rate. This page 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. United States Fed Funds Rate - actual data, historical chart and calendar of releases - was last updated on October of 2019.

Actual Previous Highest Lowest Dates Unit Frequency
2.00 2.25 20.00 0.25 1971 - 2019 percent Daily

Country Last Previous
Argentina 68.02 Oct/19
Turkey 16.50 Sep/19
Mexico 7.75 Sep/19
Russia 7.00 Sep/19
South Africa 6.50 Sep/19
Brazil 5.50 Sep/19
Indonesia 5.25 Sep/19
India 5.15 Oct/19
China 4.20 Oct/19
Saudi Arabia 2.50 Sep/19
United States 2.00 Sep/19
Canada 1.75 Sep/19
Singapore 1.72 Sep/19
South Korea 1.50 Sep/19
Australia 0.75 Oct/19
United Kingdom 0.75 Sep/19
Euro Area 0.00 Sep/19
France 0.00 Sep/19
Germany 0.00 Sep/19
Italy 0.00 Sep/19
Netherlands 0.00 Sep/19
Spain 0.00 Sep/19
Japan -0.10 Sep/19
Switzerland -0.75 Sep/19