{"id":3557,"date":"2025-11-19T00:27:26","date_gmt":"2025-11-19T00:27:26","guid":{"rendered":"https:\/\/ft365.org\/index.php\/2025\/11\/19\/federal-funds-rate-history-1980-through-the-present-bankrate\/"},"modified":"2025-11-19T00:27:26","modified_gmt":"2025-11-19T00:27:26","slug":"federal-funds-rate-history-1980-through-the-present-bankrate","status":"publish","type":"post","link":"http:\/\/ft365.org\/index.php\/2025\/11\/19\/federal-funds-rate-history-1980-through-the-present-bankrate\/","title":{"rendered":"Federal Funds Rate History: 1980 Through The Present | Bankrate"},"content":{"rendered":"
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Key takeaways<\/span> <\/span> <\/h2>\n
    \n
  • The Federal Reserve\u2019s key borrowing benchmark is currently in a target range of 3.75-4 percent. <\/li>\n
  • The Fed\u2019s monetary policy has shifted significantly over the years, from combating high inflation in the 1980s to dealing with recessions and financial crises in the 2000s and 2010s. The current era is marked by a pandemic and soaring inflation, leading to the most aggressive rate hikes in 40 years. <\/li>\n
  • The Federal Reserve\u2019s decisions significantly impact the economy, influencing borrowing costs for consumers, the job market and inflation. <\/li>\n<\/ul><\/div>\n

    Interest rates are the Federal Reserve\u2019s most powerful lever for steering the U.S. economy \u2014 and after years of keeping borrowing costs at their highest level in decades, the Fed has finally been reversing course to prevent an economic slowdown from turning into a recession.\u00a0<\/p>\n

    After holding rates steady through most of 2025, the Fed has started to ease off the brakes again. Policymakers in October lowered their key benchmark rate by a quarter of a percentage point for a second straight meeting.\u00a0<\/p>\n

    The move brings the federal funds rate down to a new target range of 3.75\u20134 percent, after previously soaring to a two-decade high of 5.25\u20135.5 percent. Even so, borrowing costs remain the highest since 2007, according to a Bankrate analysis of historic Fed moves.<\/p>\n

    When it comes to the world\u2019s most powerful central bank, the past can often be a guide. Sometimes, the Fed will cut interest rates as a proactive step to help stave off an economic slowdown. Other times, officials will keep interest rates high or hike them aggressively, tolerating a weaker economy if it means keeping inflation in check. The current cycle shows the Fed walking a fine line: balancing stubborn inflation against a labor market that\u2019s beginning to lose momentum.<\/p>\n

    To help consumers understand the historical significance of the Fed\u2019s rapid rate hikes in the post-pandemic era, Bankrate compiled this guide of the Fed\u2019s previous rate moves from 1981 to the present. Interest rates may now seem historically high, but they\u2019re lower than their historic average, the analysis found. Before the Great Recession, the market-driven \u201ceffective\u201d federal funds rate averaged 6.38 percent.<\/p>\n

    Rate moves are expressed in \u201cbasis points,\u201d which are equal to 1\/100 of a percentage point. For example, a 75 basis point increase is 0.75 percentage point.<\/p>\n

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    Changes to the Fed\u2019s monetary policy ripple through the economy, influencing borrowing, spending and investment decisions for households and businesses alike.\u00a0<\/q> \u2014 Stephen Kates, CFP, Bankrate financial analyst <\/cite> <\/p><\/blockquote><\/div>\n

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    • <\/li>\n
    • <\/li>\n
    • <\/li>\n<\/ul>\n

      Fed\u2019s interest rate history of 1981-1990: Volcker fights the \u2018Great Inflation\u2019 with historic rate moves and aggressively hawkish monetary policy<\/h2>\n

      The fed funds rate has never been as high as it was in the 1980s.<\/p>\n

      The main reason was that the Fed wanted to combat inflation, which soared in 1980 to its highest level on record: 14.6 percent.<\/p>\n

      As a result, the U.S. central bank did something that might seem counterintuitive for an institution that strives to maintain the most productive economy possible: It manufactured a recession to bring prices back down.<\/p>\n

      The fed funds rate began the decade at a target level of 14 percent in January 1980. By the time officials concluded a conference call on Dec. 5, 1980, they had hiked the target range by 2 percentage points to 19-20 percent, its highest ever.<\/p>\n

      Consumer borrowing costs soared as a result. The average rate on a 30-year fixed-rate mortgage hit the highest on record during the era, spiking to near 20 percent, Bankrate\u2019s historic data shows.<\/p>\n

      Key insights on the 1981-1990 era<\/h3>\n
      \n

      Federal Reserve Icon<\/title> <\/svg> <\/p>\n
      \n
        \n
      • Fed chair of the decade<\/strong>:\u00a0Paul Volcker (1979-1987)<\/li>\n
      • Peak of the decade<\/strong>: 19-20 percent<\/li>\n
      • Low of the decade<\/strong>: 6 percent<\/li>\n<\/ul><\/div>\n<\/p><\/div>\n

        But the Fed has changed almost as much as interest rates since then. Instead of slowly and gradually moving rates in one direction (up or down), interest rates would often rise, then fall, then rise again.<\/p>\n

        Rates fell sharply to a target range of 13-14 percent on Nov. 2, 1981, then shot back up to 15 percent in the first four months of 1982, then dropped \u00a0to 11.5-12 percent on July 20, 1982, records of the moves show. The \u201ceffective\u201d fed funds rate averaged 9.97 percent during this 10-year period. Interest rates haven\u2019t eclipsed 10 percent since November 1984.<\/p>\n

        One reason for the volatility: Chair Paul Volcker decided that the best way to combat inflation involved limiting the growth of the money supply, rather than directly targeting interest rates \u2014 the way officials control inflation today.<\/p>\n

        Other differences between today\u2019s Fed and the Fed of the past include a wider target range for the benchmark fed funds rate, sometimes spanning 5 percentage points instead of the 0.25 percentage point window today. Not to mention, the Fed would adjust rates at unscheduled meetings more often than not, after which it wouldn\u2019t release policy statements.<\/p>\n

        Volcker was the main driver of Fed policy in this decade, leading the Fed until Chairman Alan Greenspan took the post in August 1987.<\/p>\n

        Critics at the time vilified Volcker for harming the economy. Farmers, for example, drove their tractors to the Fed\u2019s headquarters in Washington, D.C., to protest higher interest rates, according to historians at the St. Louis Fed, while car dealers mailed him car keys of unsold vehicles in coffins.<\/p>\n

        The moves came with a price: Unemployment soared to almost 11 percent, at the time the highest since the Great Depression, historic Bureau of Labor Statistics data shows. Inflation, however, stayed away for years, falling to below 2 percent by 1986.<\/p>\n

        Fed interest rate history of 1991-2000: Alan Greenspan steers the Fed through a brief recession then presides over \u2018Great Moderation\u2019 with a long economic expansion<\/h2>\n

        Fed rate moves<\/h3>\n
        \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
        Meeting date<\/th>\nRate change<\/th>\nTarget<\/th>\n<\/tr>\n<\/thead>\n
        January 9, 1991: Conference call<\/td>\n-25 basis points<\/td>\n6.75 percent<\/td>\n<\/tr>\n
        February 1, 1991: Conference call<\/td>\n-50 basis points<\/td>\n6.25 percent<\/td>\n<\/tr>\n
        March 8, 1991: Unscheduled move<\/td>\n-25 basis points<\/td>\n6 percent<\/td>\n<\/tr>\n
        April 30, 1991: Conference call<\/td>\n-25 basis points<\/td>\n5.75 percent<\/td>\n<\/tr>\n
        Aug. 5, 1991: Conference call<\/td>\n-25 basis points<\/td>\n5.5 percent<\/td>\n<\/tr>\n
        Sept. 13, 1991: Conference call<\/td>\n-25 basis points<\/td>\n5.25 percent<\/td>\n<\/tr>\n
        Oct. 30, 1991: Conference call<\/td>\n-25 basis points<\/td>\n5 percent<\/td>\n<\/tr>\n
        Nov. 5, 1991<\/td>\n-25 basis points<\/td>\n4.75 percent<\/td>\n<\/tr>\n
        Dec. 6, 1991 (After a Dec. 2, 1991, conference call)<\/td>\n-25 basis points<\/td>\n4.5 percent<\/td>\n<\/tr>\n
        Dec. 20, 1991 (After Dec. 17, 2001, meeting)<\/td>\n-50 basis points<\/td>\n4 percent<\/td>\n<\/tr>\n
        April 9, 1992: Unscheduled move<\/td>\n-25 basis points<\/td>\n3.75 percent<\/td>\n<\/tr>\n
        June 30-July 1, 1992<\/td>\n-50 basis points<\/td>\n3.25 percent<\/td>\n<\/tr>\n
        Sept. 4, 1992: Unscheduled move<\/td>\n-25 basis points<\/td>\n3 percent<\/td>\n<\/tr>\n
        Feb. 3-4, 1994<\/td>\n+25 basis points<\/td>\n3.25 percent<\/td>\n<\/tr>\n
        March 22, 1994<\/td>\n+25 basis points<\/td>\n3.5 percent<\/td>\n<\/tr>\n
        April 18, 1994: Emergency meeting<\/td>\n+25 basis points<\/td>\n3.75 percent<\/td>\n<\/tr>\n
        May 17, 1994<\/td>\n+50 basis points<\/td>\n4.25 percent<\/td>\n<\/tr>\n
        Aug. 16, 1994<\/td>\n+50 basis points<\/td>\n4.75 percent<\/td>\n<\/tr>\n
        Nov. 15, 1994<\/td>\n+75 basis points<\/td>\n5.5 percent<\/td>\n<\/tr>\n
        Jan. 31-Feb. 1, 1995<\/td>\n+50 basis points<\/td>\n6 percent<\/td>\n<\/tr>\n
        July 5- 6, 1995<\/td>\n-25 basis points<\/td>\n5.75 percent<\/td>\n<\/tr>\n
        Dec. 19, 1995<\/td>\n-25 basis points<\/td>\n5.5 percent<\/td>\n<\/tr>\n
        Jan. 30-31, 1996<\/td>\n-25 basis points<\/td>\n5.25 percent<\/td>\n<\/tr>\n
        March 25, 1997<\/td>\n+25 basis points<\/td>\n5.5 percent<\/td>\n<\/tr>\n
        Sept. 29, 1998<\/td>\n-25 basis points<\/td>\n5.25 percent<\/td>\n<\/tr>\n
        Oct. 15, 1998: Emergency meeting<\/td>\n-25 basis points<\/td>\n5 percent<\/td>\n<\/tr>\n
        Nov. 17, 1998<\/td>\n-25 basis points<\/td>\n4.75 percent<\/td>\n<\/tr>\n
        June 29-30, 1999<\/td>\n+25 basis points<\/td>\n5 percent<\/td>\n<\/tr>\n
        Aug. 24, 1999<\/td>\n+25 basis points<\/td>\n5.25 percent<\/td>\n<\/tr>\n
        Nov. 16, 1999<\/td>\n+25 basis points<\/td>\n5.5 percent<\/td>\n<\/tr>\n
        Feb. 1-2, 2000<\/td>\n+25 basis points<\/td>\n5.75 percent<\/td>\n<\/tr>\n
        March 21, 2000<\/td>\n+25 basis points<\/td>\n6 percent<\/td>\n<\/tr>\n
        May 16, 2000<\/td>\n+50 basis points<\/td>\n6.5 percent<\/td>\n<\/tr>\n<\/tbody>\n
        Source: Fed\u2019s board of governors<\/em><\/td>\n<\/tr>\n<\/tfoot>\n<\/table>\n<\/div>\n

        After a tumultuous few years for the Fed during the Great Inflation, Greenspan faced a much calmer period, though that\u2019s not to say he didn\u2019t have his fair share of challenges during his near 18-year tenure at the helm of the Fed.<\/p>\n

        After an eight-month recession beginning in August 1990, Greenspan and Co. managed to take the fed funds rate all the way up to a target level of 6.5 percent in May 2000, the highest of the period. Rates reached a low of 3 percent in September 1992, the lowest of the decade.<\/p>\n

        Besides during the early 1990s, the Fed mainly adjusted rates at Federal Open Market Committee (FOMC) meetings, a practice that is in rhythm with today\u2019s Fed. Officials did hike rates on April 19, 1994, at an emergency meeting due to inflation worries, and they cut borrowing costs at an unscheduled Oct. 15, 1998, gathering.<\/p>\n

        Key insights on the 1991-2000 era<\/h3>\n
        \n

        Federal Reserve Icon<\/title> <\/svg> <\/p>\n
        \n
          \n
        • Fed chair of the decade<\/strong>: Alan Greenspan (1987-2006)<\/li>\n
        • Peak of the decade<\/strong>: 6.75 percent<\/li>\n
        • Low of the decade<\/strong>: 3 percent<\/li>\n<\/ul><\/div>\n<\/p><\/div>\n

          Another noteworthy feat: The U.S. central bank also made its first \u201cinsurance\u201d cuts, meaning officials cut interest rates to give the economy an extra boost, not to fight a recession. Such was the case in 1995, 1996 and 1998, when the financial system confronted a share of headwinds ranging from debt default in Russia to a major hedge fund\u2019s collapse.<\/p>\n

          The longest-serving Fed chair to date, Greenspan is often nicknamed \u201cmaestro\u201d for having steered the economy through the longest economic expansion at the time. The Fed unofficially began identifying 2 percent as its inflation target during this decade \u2014 a pivotal decision that would irrevocably change modern monetary policy.<\/p>\n

          A proponent of deregulation, however, his policies would later be blamed for fueling asset bubbles that led to the dot-com boom and bust and the housing bubble that sparked the 2008 financial crisis.<\/p>\n

          Fed interest rate history of 2001-2010: Fed faces the dot-com bust, the 9\/11 terrorist attacks and the 2008 financial crisis<\/h2>\n

          Rate cuts 2001-2003<\/h3>\n
          \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
          Meeting date<\/th>\nRate change<\/th>\nTarget<\/th>\n<\/tr>\n<\/thead>\n
          Jan. 3, 2001: Emergency meeting<\/td>\n-50 basis points<\/td>\n6 percent<\/td>\n<\/tr>\n
          Jan 30-31, 2001<\/td>\n-50 basis points<\/td>\n5.5 percent<\/td>\n<\/tr>\n
          March 20, 2001<\/td>\n-50 basis points<\/td>\n5 percent<\/td>\n<\/tr>\n
          April 18, 2001: Emergency meeting<\/td>\n-50 basis points<\/td>\n4.5 percent<\/td>\n<\/tr>\n
          May 15, 2001<\/td>\n-50 basis points<\/td>\n4 percent<\/td>\n<\/tr>\n
          June 26-27, 2001<\/td>\n-25 basis points<\/td>\n3.75 percent<\/td>\n<\/tr>\n
          Aug. 21, 2001<\/td>\n-25 basis points<\/td>\n3.5 percent<\/td>\n<\/tr>\n
          September 17, 2001: Emergency meeting<\/td>\n-50 basis points<\/td>\n3 percent<\/td>\n<\/tr>\n
          Oct. 2, 2001<\/td>\n-50 basis points<\/td>\n2.5 percent<\/td>\n<\/tr>\n
          Nov. 6, 2001<\/td>\n-50 basis points<\/td>\n2 percent<\/td>\n<\/tr>\n
          Dec. 11, 2001<\/td>\n-25 basis points<\/td>\n1.75 percent<\/td>\n<\/tr>\n
          Nov. 6, 2002<\/td>\n-50 basis points<\/td>\n1.25 percent<\/td>\n<\/tr>\n
          June 24-25, 2003<\/td>\n-25 basis points<\/td>\n1 percent<\/td>\n<\/tr>\n<\/tbody>\n
          Source: Fed\u2019s board of governors<\/em><\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tfoot>\n<\/table>\n<\/div>\n

          Rate hikes 2004-2006<\/h3>\n
          \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
          Meeting date<\/th>\nRate change<\/th>\nTarget<\/th>\n<\/tr>\n<\/thead>\n
          June 29-30, 2004<\/td>\n+25 basis points<\/td>\n1.25 percent<\/td>\n<\/tr>\n
          Aug. 10, 2004<\/td>\n+25 basis points<\/td>\n1.5 percent<\/td>\n<\/tr>\n
          Sept. 21, 2004<\/td>\n+25 basis points<\/td>\n1.75 percent<\/td>\n<\/tr>\n
          Nov. 10, 2004<\/td>\n+25 basis points<\/td>\n2 percent<\/td>\n<\/tr>\n
          Dec. 14, 2004<\/td>\n+25 basis points<\/td>\n2.25 percent<\/td>\n<\/tr>\n
          Feb. 1-2, 2005<\/td>\n+25 basis points<\/td>\n2.5 percent<\/td>\n<\/tr>\n
          March 22, 2005<\/td>\n+25 basis points<\/td>\n2.75 percent<\/td>\n<\/tr>\n
          May 3, 2005<\/td>\n+25 basis points<\/td>\n3 percent<\/td>\n<\/tr>\n
          June 29-30, 2005<\/td>\n+25 basis points<\/td>\n3.25 percent<\/td>\n<\/tr>\n
          Aug. 9, 2005<\/td>\n+25 basis points<\/td>\n3.5 percent<\/td>\n<\/tr>\n
          Sept. 20, 2005<\/td>\n+25 basis points<\/td>\n3.75 percent<\/td>\n<\/tr>\n
          Nov. 1, 2005<\/td>\n+25 basis points<\/td>\n4 percent<\/td>\n<\/tr>\n
          Dec. 13, 2005<\/td>\n+25 basis points<\/td>\n4.25 percent<\/td>\n<\/tr>\n
          Jan. 31, 2006<\/td>\n+25 basis points<\/td>\n4.5 percent<\/td>\n<\/tr>\n
          March 28, 2006<\/td>\n+25 basis points<\/td>\n4.75 percent<\/td>\n<\/tr>\n
          May 10, 2006<\/td>\n+25 basis points<\/td>\n5 percent<\/td>\n<\/tr>\n
          June 29, 2006<\/td>\n+25 basis points<\/td>\n5.25 percent<\/td>\n<\/tr>\n<\/tbody>\n
          Source: Fed\u2019s board of governors<\/em><\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tfoot>\n<\/table>\n<\/div>\n

          Rate cuts 2007-2008<\/h3>\n
          \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
          Meeting date<\/th>\nRate change<\/th>\nTarget & target range<\/th>\n<\/tr>\n<\/thead>\n
          Sept. 18, 2007<\/td>\n-50 basis points<\/td>\n4.75 percent<\/td>\n<\/tr>\n
          Oct. 30-31, 2007<\/td>\n-25 basis points<\/td>\n4.5 percent<\/td>\n<\/tr>\n
          Dec. 11, 2007<\/td>\n-25 basis points<\/td>\n4.25 percent<\/td>\n<\/tr>\n
          Jan. 22, 2008: Emergency meeting<\/td>\n-75 basis points<\/td>\n3.5 percent<\/td>\n<\/tr>\n
          Jan. 29-30, 2008<\/td>\n-50 basis points<\/td>\n3 percent<\/td>\n<\/tr>\n
          March 18, 2008<\/td>\n-75 basis points<\/td>\n2.25 percent<\/td>\n<\/tr>\n
          April 29-30, 2008<\/td>\n-25 basis points<\/td>\n2 percent<\/td>\n<\/tr>\n
          Oct 8, 2008: Emergency meeting<\/td>\n-50 basis points<\/td>\n1.50 percent<\/td>\n<\/tr>\n
          Oct. 28-29, 2008<\/td>\n-50 basis points<\/td>\n1 percent<\/td>\n<\/tr>\n
          Dec. 15-16, 2008<\/td>\n-100 to 75 basis points<\/td>\n0-0.25 percent<\/td>\n<\/tr>\n<\/tbody>\n
          Source: Fed\u2019s board of governors<\/em><\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tfoot>\n<\/table>\n<\/div>\n

          The 2000s were the Fed\u2019s most rhythmic period yet, with the Fed following clear cycles for both tightening and loosening rates.<\/p>\n

          To start the decade, the Fed slashed interest rates 13 times to a low of 1 percent \u2014 a range that might\u2019ve been unthinkable for those who remembered rates in the \u201880s \u2014 after a stock market bubble in the technology sector burst, kickstarting a recession that was exacerbated by the 9\/11 terrorist attacks.<\/p>\n

          Key insights on the 2001-2010 era<\/h3>\n
          \n

          Federal Reserve Icon<\/title> <\/svg> <\/p>\n
          \n
            \n
          • Fed chairs of the decade<\/strong>:\n
              \n
            • Alan Greenspan (1987-2006)<\/li>\n
            • Ben Bernanke (2006-2014)<\/li>\n<\/ul>\n<\/li>\n
            • Peak of the decade<\/strong>: 6 percent<\/li>\n
            • Low of the decade<\/strong>: 1 percent<\/li>\n<\/ul><\/div>\n<\/p><\/div>\n

              The U.S. central bank then managed to hike interest rates 17 times between 2004 and 2006 \u2014 all of those increases in gradual, quarter-point moves \u2014 to a high of 5.25 percent.<\/p>\n

              That was until the financial crisis of 2008 happened and the ensuing Great Recession, which slammed the brakes on the economy. The Fed then did the unthinkable: It slashed interest rates by 100 basis points to near-zero. Chairman Ben Bernanke led the Fed during this period, which was, at the time, one of its most aggressive economic rescue efforts in Fed history.<\/p>\n

              During this era, the Fed also unveiled an experimental, unconventional monetary policy tool: quantitative easing, or large scale asset purchases (LSAPs) as they\u2019re formally known. A massive bond-buying program to lower long-term interest rates and give the economy a bigger boost caused the Fed\u2019s balance sheet to balloon, soaring to $4.5 trillion from a starting place of $870 billion.<\/p>\n

              Fed interest rate history of 2011-2020: The economy recovers from the Great Recession and faces the coronavirus pandemic a decade later<\/h2>\n

              Rate hikes 2015-2018<\/h3>\n
              \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
              Meeting date<\/th>\nRate change<\/th>\nTarget range<\/th>\n<\/tr>\n<\/thead>\n
              Dec. 15-16, 2015<\/td>\n+25 basis points<\/td>\n0.25-0.5 percent<\/td>\n<\/tr>\n
              Dec. 13-14, 2016<\/td>\n+25 basis points<\/td>\n0.5-0.75 percent<\/td>\n<\/tr>\n
              March 14-15, 2017<\/td>\n+25 basis points<\/td>\n0.75-1 percent<\/td>\n<\/tr>\n
              June 13-14, 2017<\/td>\n+25 basis points<\/td>\n1-1.25 percent<\/td>\n<\/tr>\n
              Dec. 12-13, 2017<\/td>\n+25 basis points<\/td>\n1.25-1.5 percent<\/td>\n<\/tr>\n
              March 20-21, 2018<\/td>\n+25 basis points<\/td>\n1.5-1.75 percent<\/td>\n<\/tr>\n
              June 12-13, 2018<\/td>\n+25 basis points<\/td>\n1.75-2 percent<\/td>\n<\/tr>\n
              Sept. 25-26, 2018<\/td>\n+25 basis points<\/td>\n2-2.25 percent<\/td>\n<\/tr>\n
              Dec. 18-19, 2018<\/td>\n+25 basis points<\/td>\n2.25-2.5 percent<\/td>\n<\/tr>\n<\/tbody>\n
              Source: Fed\u2019s board of governors<\/em><\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tfoot>\n<\/table>\n<\/div>\n

              Rate cuts 2019-2020<\/h3>\n
              \n\n\n\n\n\n\n\n\n\n\n\n
              Meeting date<\/th>\nRate change<\/th>\nTarget range<\/th>\n<\/tr>\n<\/thead>\n
              July 30-31, 2019<\/td>\n-25 basis points<\/td>\n2-2.25 percent<\/td>\n<\/tr>\n
              Sept. 17-18, 2019<\/td>\n-25 basis points<\/td>\n1.75-2 percent<\/td>\n<\/tr>\n
              Oct. 29-30, 2019<\/td>\n-25 basis points<\/td>\n1.5-1.75 percent<\/td>\n<\/tr>\n
              March 3, 2020: Emergency meeting<\/td>\n-50 basis points<\/td>\n1-1.25 percent<\/td>\n<\/tr>\n
              March 14-15, 2020: Emergency meeting<\/td>\n-100 basis points<\/td>\n0-0.25 percent<\/td>\n<\/tr>\n<\/tbody>\n
              Source: Fed\u2019s board of governors<\/em><\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tfoot>\n<\/table>\n<\/div>\n

              The Fed couldn\u2019t escape zero rates in the 2010s amid the U.S. economy\u2019s slow recovery from the Great Recession.\u00a0<\/p>\n

              Officials would ultimately end up leaving interest rates at rock-bottom until 2015, after which they only hiked interest rates by 25 basis points once per year. That is until 2017, when the Fed hiked rates three times, and 2018, when they hiked them four more times. The fed funds rate peaked at 2.25-2.5 percent.<\/p>\n

              Facing tepid inflation and moderating growth, the Fed also decided in 2019 to cut interest rates three times to give the economy a fresh boost \u2014 similar to Greenspan\u2019s \u201cinsurance\u201d cuts of the 1990s.<\/p>\n

              Key insights on the 2011-2020 era<\/h3>\n
              \n

              Federal Reserve Icon<\/title> <\/svg> <\/p>\n
              \n
                \n
              • Fed chairs of the decade<\/strong>:\n
                  \n
                • Ben Bernanke (2006-2014)<\/li>\n
                • Janet Yellen (2014-2018)<\/li>\n
                • Jerome Powell (2018-Present)<\/li>\n<\/ul>\n<\/li>\n
                • Peak of the decade<\/strong>: 2.25-2.5 percent<\/li>\n
                • Low of the decade<\/strong>: 0-0.25 percent<\/li>\n<\/ul><\/div>\n<\/p><\/div>\n

                  The fed funds rate looked like it was about to settle there until the coronavirus pandemic came along, ushering in another era of near-zero rates. The Fed slashed rates to zero across two emergency meetings within 13 days of each other as the gears of the economy came to a halt.<\/p>\n

                  Chair Janet Yellen took the helm of the Fed from Bernanke in February 2014 and steered the economy through its Great Recession recovery until February 2018, when Chair Jerome Powell was installed.<\/p>\n

                  Fed interest rate today 2021-present: The Fed\u2019s latest moves in an era of soaring inflation<\/h2>\n

                  Rate hikes 2022-July 2023<\/h3>\n
                  \n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
                  Meeting date<\/th>\nRate change<\/th>\nTarget range<\/th>\n<\/tr>\n<\/thead>\n
                  March 15-16, 2022<\/td>\n+25 basis points<\/td>\n0.25-0.5 percent<\/td>\n<\/tr>\n
                  May 3-4, 2022<\/td>\n+50 basis points<\/td>\n0.75-1 percent<\/td>\n<\/tr>\n
                  June 14-15, 2022<\/td>\n+75 basis points<\/td>\n1.50-1.75 percent<\/td>\n<\/tr>\n
                  July 26-27, 2022<\/td>\n+75 basis points<\/td>\n2.25-2.5 percent<\/td>\n<\/tr>\n
                  Sept. 20-21, 2022<\/td>\n+75 basis points<\/td>\n3-3.25 percent<\/td>\n<\/tr>\n
                  Nov. 1-2, 2022<\/td>\n+75 basis points<\/td>\n3.75-4 percent<\/td>\n<\/tr>\n
                  Dec. 13-14, 2022<\/td>\n+50 basis points<\/td>\n4.25-4.5 percent<\/td>\n<\/tr>\n
                  Jan. 31-Feb. 1, 2023<\/td>\n+25 basis points<\/td>\n4.5-4.75 percent<\/td>\n<\/tr>\n
                  March 21-22, 2023<\/td>\n+25 basis points<\/td>\n4.75-5 percent<\/td>\n<\/tr>\n
                  May 2-3, 2023<\/td>\n+25 basis points<\/td>\n5-5.25 percent<\/td>\n<\/tr>\n
                  July 25-26, 2023<\/td>\n+25 basis points<\/td>\n5.25-5.5 percent<\/td>\n<\/tr>\n<\/tbody>\n
                  Source: Fed\u2019s board of governors<\/em><\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tfoot>\n<\/table>\n<\/div>\n

                  Rate cuts 2024-Present<\/strong><\/h3>\n
                  \n\n\n\n\n\n\n\n\n\n\n\n
                  Meeting date<\/strong><\/th>\nRate change<\/th>\nTarget range<\/th>\n<\/tr>\n<\/thead>\n
                  Sept. 17-18, 2024<\/td>\n-50 basis points<\/td>\n4.75-5 percent<\/td>\n<\/tr>\n
                  Nov. 6-7, 2024<\/td>\n-25 basis points<\/td>\n4.5-4.75 percent<\/td>\n<\/tr>\n
                  Dec. 17-18, 2024<\/td>\n-25 basis points<\/td>\n4.25-4.5 percent<\/td>\n<\/tr>\n
                  Sept. 16-17, 2025<\/td>\n-25 basis points<\/td>\n4-4.25 percent<\/td>\n<\/tr>\n
                  Oct. 28-29, 2025<\/td>\n-25 basis points<\/td>\n3.75-4 percent<\/td>\n<\/tr>\n<\/tbody>\n
                  Source: Fed\u2019s board of governors<\/em><\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tfoot>\n<\/table>\n<\/div>\n

                  It\u2019s been a blast from the past for Fed rate-setting, with inflation returning as the No. 1 economic threat in the aftermath of the coronavirus crisis.<\/p>\n

                  The Fed hiked interest rates by a quarter point in March 2022 for the first time since 2018, and it didn\u2019t stop breaking milestones there. The Fed approved the largest rate hike since 2000 during its May 2022 gathering when it raised interest rates by half a percentage point, as well as the largest rate hike since 1994 when it lifted interest rates by three-quarters of a percentage point in June 2022. The Fed followed up on that historic move with three additional 0.75 percentage-point increases.<\/p>\n

                  Officials felt comfortable leaving their foot on the gas even as inflation soared to a 40-year high \u2014 in part, because they were guided under a false assumption that massive price pressures were only temporary. They also wanted to give the economy time to recover from the coronavirus pandemic.<\/p>\n

                  Experts say U.S. central bankers usually worry about the wrong conflict. Just as officials spent the 1990s worried about inflation, the Fed has probably spent the early 2020s fearing too-low inflation, says Scott Sumner, monetary policy chair emeritus at George Mason University\u2019s Mercatus Center.<\/p>\n

                  \u201cCentral banks tend to focus on fighting the last war,\u201d Sumner says. \u201cIf you have a lot of inflation, you get a more hawkish stance. If you\u2019ve undershot your inflation target, then the Fed thinks, \u2018Well, maybe we should\u2019ve been more expansionary.\u2019 Powell came into his job with that determination, that if there was another recession, they would be more aggressive. My own view is that the strategy was relatively successful at first but pushed too far.\u201d<\/p>\n

                  Key insights on the U.S. central bank in the 2020s<\/h3>\n
                  \n

                  Federal Reserve Icon<\/title> <\/svg> <\/p>\n
                  \n
                    \n
                  • Fed chair of the decade<\/strong>: Jerome Powell (2018-Present)<\/li>\n
                  • Peak of the decade<\/strong>: 5.25-5.5 percent<\/li>\n
                  • Low of the decade<\/strong>: 0-0.25 percent<\/li>\n<\/ul><\/div>\n<\/p><\/div>\n

                    By many standards, however, an entirely different U.S. central bank is steering the boat, meaning officials don\u2019t want to tame inflation with aggressive, volatile rate hikes similar to the 1980s, he adds. Yet, officials have also spoken out against the stop-and-go manner of rate hikes leading up to the Great Inflation of the 1980s.<\/p>\n

                    \u201cThe successful Volcker disinflation in the early 1980s followed multiple failed attempts to lower inflation over the previous 15 years,\u201d Powell said in a pivotal 2022 speech at the Fed\u2019s annual monetary policy symposium in Jackson Hole, Wyoming. \u201cOur aim is to avoid that outcome by acting with resolve now.\u201d<\/p>\n

                    Inflation has cooled considerably since the Fed began forcefully hiking rates. Prices in September rose 3 percent from a year ago, three times slower than the eye-popping 9.1 percent annual rate from June 2022, according to the Bureau of Labor Statistics consumer price index (CPI). Yet, price pressures remain above the Fed\u2019s 2 percent target and have recently shown signs of reaccelerating as businesses pass along higher costs from new tariffs. Excluding the more volatile food and energy categories, so-called core inflation is also up 3 percent from a year ago, BLS data also shows.<\/p>\n

                    The Fed, however, finds itself in an increasingly tricky position. Unemployment has also risen, and job growth has slowed markedly since the Fed started raising interest rates. Concerns about stalling economic growth were a key motivation behind the Fed\u2019s decision to cut interest rates in the fall of 2024 \u2014 and again this year.<\/p>\n

                    Bottom line<\/h2>\n
                    \n

                    Even with 1.5 percentage points worth of rate cuts so far since September 2024, Fed officials don\u2019t appear eager to move quickly. Officials say they\u2019re keeping a close eye on how factors such as tariffs may impact prices, reiterating that future rate cuts aren\u2019t guaranteed.\u00a0<\/p>\n

                    Concentrate on eliminating high-interest debt, boosting your credit score and shopping around for the best places where you can park your cash, so your money is rewarded.<\/p>\n<\/div>\n

                    \u201cAmericans\u2019 financial security is primarily in their own hands,\u201d Kates says. \u201cThey should take steps to ensure they are prepared for good and bad outcomes.\u201d<\/p>\n

                    \n
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                    Key takeaways The Federal Reserve\u2019s key borrowing benchmark is currently in a target range of 3.75-4 percent. The Fed\u2019s monetary policy has shifted significantly over the years, from combating high inflation in the 1980s to dealing with recessions and financial crises in the 2000s and 2010s. The current era is marked by a pandemic and<\/p>\n","protected":false},"author":2,"featured_media":3558,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-3557","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-latest-news"],"featured_image_urls":{"full":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/11\/3557-BR_History_of_the_Fed_funds_rate.jpg",1280,720,false],"thumbnail":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/11\/3557-BR_History_of_the_Fed_funds_rate-150x150.jpg",150,150,true],"medium":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/11\/3557-BR_History_of_the_Fed_funds_rate-300x169.jpg",300,169,true],"medium_large":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/11\/3557-BR_History_of_the_Fed_funds_rate-768x432.jpg",640,360,true],"large":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/11\/3557-BR_History_of_the_Fed_funds_rate-1024x576.jpg",640,360,true],"1536x1536":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/11\/3557-BR_History_of_the_Fed_funds_rate.jpg",1280,720,false],"2048x2048":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/11\/3557-BR_History_of_the_Fed_funds_rate.jpg",1280,720,false],"morenews-featured":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/11\/3557-BR_History_of_the_Fed_funds_rate-1024x576.jpg",1024,576,true],"morenews-large":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/11\/3557-BR_History_of_the_Fed_funds_rate-825x575.jpg",825,575,true],"morenews-medium":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/11\/3557-BR_History_of_the_Fed_funds_rate-590x410.jpg",590,410,true],"crawlomatic_preview_image":["http:\/\/ft365.org\/wp-content\/uploads\/2025\/11\/3557-BR_History_of_the_Fed_funds_rate-260x146.jpg",260,146,true]},"author_info":{"display_name":"henry","author_link":"http:\/\/ft365.org\/index.php\/author\/henry\/"},"category_info":"Latest News<\/a>","tag_info":"Latest News","comment_count":"0","_links":{"self":[{"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/posts\/3557","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/comments?post=3557"}],"version-history":[{"count":0,"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/posts\/3557\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/media\/3558"}],"wp:attachment":[{"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/media?parent=3557"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/categories?post=3557"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/ft365.org\/index.php\/wp-json\/wp\/v2\/tags?post=3557"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}