The Federal Reserve lowered the target range for the federal funds rate to 2-2.25 percent during its July meeting, the first 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 5.66 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 2.25 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 2.00 in 12 months time. In the long-term, the United States Fed Funds Rate is projected to trend around 2.50 percent in 2020, according to our econometric models.

United States Fed Funds Rate
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Calendar GMT Actual Previous Consensus TEForecast
2019-03-20 06:00 PM Fed Interest Rate Decision 2.5% 2.5% 2.5% 2.5%
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%
2019-08-23 02:00 PM Fed Chair Powell Speech
2019-08-23 02:00 PM Jackson Hole Economic Policy Symposium
2019-08-24 02:00 PM Jackson Hole Economic Policy Symposium

Fed Policymakers Saw July Cut as Mid-Cycle Adjustment

Fed officials viewed their interest-rate cut as an adjustment that would help counter the effects on the outlook of weak global growth and trade policy uncertainty while promoting a faster return of inflation to the central bank's target, minutes of the July meeting showed. Policymakers also noted that further policy action would be guided by incoming information and its implications for the economic outlook and that any appearance of following a preset course should be avoided.

Excerpts from the minutes of the Federal Open Market Committee, July 30-31, 2019:

In their discussion of monetary policy decisions at this meeting, those participants who favored a reduction in the target range for the federal funds rate pointed to three broad categories of reasons for supporting that action.

-First, while the overall outlook remained favorable, there had been signs of deceleration in economic activity in recent quarters, particularly in business fixed investment and manufacturing. A pronounced slowing in economic growth in overseas economies—perhaps related in part to developments in, and uncertainties surrounding, international trade—appeared to be an important factor in this deceleration.
-Second, a policy easing at this meeting would be a prudent step from a risk-management perspective. Despite some encouraging signs over the intermeeting period, many of the risks and uncertainties surrounding the economic outlook that had been a source of concern in June had remained elevated, particularly those associated with the global economic outlook and international trade.
-Third, there were concerns about the outlook for inflation. A number of participants observed that overall inflation had continued to run below the Committee's 2 percent objective, as had inflation for items other than food and energy. Several of these participants commented that the fact that wage pressures had remained only moderate despite the low unemployment rate could be a sign that the longer-run normal level of the unemployment rate is appreciably lower than often assumed.

A couple of participants indicated that they would have preferred a 50 basis point cut in the federal funds rate at this meeting rather than a 25 basis point reduction.

Several participants favored maintaining the same target range at this meeting, judging that the real economy continued to be in a good place, bolstered by confident consumers, a strong job market, and a low rate of unemployment. These participants acknowledged that there were lingering risks and uncertainties about the global economy in general, and about international trade in particular, but they viewed those risks as having diminished over the intermeeting period. In addition, they viewed the news on inflation over the intermeeting period as consistent with their forecasts that inflation would move up to the Committee's 2 percent objective at an acceptable pace without an adjustment in policy at this meeting. Finally, a few participants expressed concerns that further monetary accommodation presented a risk to financial stability in certain sectors of the economy or that a reduction in the target range for the federal funds rate at this meeting could be misinterpreted as a negative signal about the state of the economy.

In their discussion of the outlook for monetary policy beyond this meeting, participants generally favored an approach in which policy would be guided by incoming information and its implications for the economic outlook and that avoided any appearance of following a preset course. Most participants viewed a proposed quarter-point policy easing at this meeting as part of a recalibration of the stance of policy, or mid-cycle adjustment, in response to the evolution of the economic outlook over recent months. A number of participants suggested that the nature of many of the risks they judged to be weighing on the economy, and the absence of clarity regarding when those risks might be resolved, highlighted the need for policymakers to remain flexible and focused on the implications of incoming data for the outlook.

Federal Reserve | Joana Ferreira |
8/21/2019 6:33:11 PM

United States Money Last Previous Highest Lowest Unit
Interest Rate 2.25 2.50 20.00 0.25 percent [+]
Money Supply M0 3260366.00 3274900.00 4075039.00 48362.00 USD Million [+]
Money Supply M1 3852.40 3831.70 3852.40 138.90 USD Billion [+]
Interbank Rate 2.15 2.15 10.63 0.22 percent [+]
Money Supply M2 14872.10 14755.10 14872.10 286.60 USD Billion [+]
Central Bank Balance Sheet 3744394.00 3741539.00 4473864.00 672444.00 USD Million [+]
Banks Balance Sheet 17524757.00 17353262.00 17524757.00 697581.70 USD Million [+]
Foreign Exchange Reserves 128338.00 126967.00 153075.00 12128.00 USD Million [+]
Loans to Private Sector 2356.33 2346.38 2356.33 13.65 USD Billion [+]
Foreign Bond Investment -7710.00 -32785.00 118012.00 -77351.00 USD Million [+]
Private Debt to GDP 196.70 201.80 212.90 156.20 percent [+]

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 August of 2019.

Actual Previous Highest Lowest Dates Unit Frequency
2.25 2.50 20.00 0.25 1971 - 2019 percent Daily

Country Last Previous
Argentina 74.98 Aug/19
Turkey 19.75 Jul/19
Mexico 8.00 Aug/19
Russia 7.25 Jul/19
South Africa 6.50 Aug/19
Brazil 6.00 Jul/19
Indonesia 5.50 Aug/19
India 5.40 Aug/19
China 4.25 Aug/19
Saudi Arabia 2.75 Aug/19
United States 2.25 Jul/19
Singapore 1.94 Jul/19
Canada 1.75 Aug/19
South Korea 1.50 Jul/19
Australia 1.00 Aug/19
United Kingdom 0.75 Aug/19
Euro Area 0.00 Jul/19
France 0.00 Jul/19
Germany 0.00 Jul/19
Italy 0.00 Jul/19
Netherlands 0.00 Jul/19
Spain 0.00 Jul/19
Japan -0.10 Aug/19
Switzerland -0.75 Aug/19