Fed Funds | US Federal Reserve interest rate

Chart for the main interest rate of the US Federal Reserve (Fed). Fed Funds objective over a long period for the USA.

Fed Funds | US Federal Reserve interest rate
Please find below a chart for the Fed Funds rate, US Federal Reserve (Fed) main interest rate. The chart begins in 1993.

Since 1995, the Fed conducts its monetary policy by raising or lowering the target for Fed Funds. In normal times, the Fed Funds effective on the overnight interbank market in the USA is very close to the target.

The Fed’s dual mandate is to maintain price stability and full employment. Fed’s definition of price stability is a rise in prices close to but lower than 2% year-on-year for core inflation over the medium-term (index: Personal Consumer Expenditure price index; core exclude food and energy prices) and its definition for full employment is an unemployment rate in a 5% to 6% range over the medium-term.

The Fed Funds target is set during the Federal Open Market Committee (FOMC). The FOMC consists of 12 voting members (7 permanent members from the Board of Governors including the Fed’s president, the New York Fed’s president and 4 non-permanent members from the remaining eleven Reserve Bank presidents). Non-permanent seats are filled for one year. Nonvoting Reserve Bank presidents participate to the FOMC. The FOMC holds eight regularly scheduled meetings per year.

In end of 2008, confronted to the worst crisis since the Great Depression, the Fed lowered its Fed Funds rate close to zero (range for 0 to 0.25%). The necessity to stimulate further the US economy, the Fed decided to launch a quantitative easing (QE) policy. In the fall of 2010, a QE2 was implemented.

Fed Funds target rate | Interest rate of the US Federal Reserve

Fed Funds US interest rate
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Friday, February 4th 2011

World Economic Snapshot
CB 0.25% 1.50% 6.56% 0.1% 0.5% 1% 0.25% 12.25%
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Price 3.6% 2.7% 5.5% 0.3% 4.5% 3.3% 0.3% 6.1%
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