The Fed cut rates at its seventh meeting by 25 basis points on Wednesday, December 18, 2024, to a target range of 4.25% to 4.50%. This is the third cut we’ve seen since 2020.
Latest federal funds rate data at a glance
- Current Fed rate: The Fed cut rates to a range of 4.25%–4.50% following the December 18, 2024 meeting(1)
- Effective federal funds rate: 4.83% as of December 18, 2024(4)
- Previous meeting: Cut of 0.25% to 4.5%–4.75% on November 7, 2024(1)
- Rate this time last year: Held rates at a range of 5.25%–5.50% at its December meeting in 2023(1)
- Next meeting: January 28-29, 2025(2)
- Highest rate since 1954: 19.1% monthly average recorded June 1981(3)
- Lowest rate since 1954: 0.05% monthly average recorded April 2020(3)
Changes to the federal funds rate in the last 12 months
The Fed finally cut rates in September, a trend that continued at the November and December meetings, bringing the target range from 4.5%–4.75% to 4.25%–4.5% following the eighth and final Federal Open Market Committee (FOMC) meeting of 2024.
Over the last 24 months or so, we’ve seen a lot of movement in the Fed rate, with the Fed raising rates four times in 2023, starting with consecutive rate increases of 25 basis points in February, March and May 2023. Rates were then held in June and increased by a further 25 basis point hike in July. Since then, there has been a string of holds until the final three meetings of 2024.
The Fed raised rates seven times in 2022, which is the highest number of Fed rate hikes in a single year since 2005. While 2005 saw more Fed rate hikes in total (8), individual increases were just 25 basis points, whereas the changes in 2022 have ranged from 25 to 75 basis points.
6 years of changes to the federal funds rate
Since 2018, the average federal funds rate has been 2.32%, which is about half of where we’re at today. However, during this period, the US saw historically low rates, in part due to Covid. Rates hit a record low of 0.05% for the months of April and May 2020.
The history of federal funds rate changes
It’s not a great sign that the Fed rate is up compared to its average over the last decade or so. However, following the rate cuts in September and November, the effective federal funds rate should be around 4.61%, which is in line with the average rate since 1954 (4.6%).
2025 FOMC meeting calendar
Eight meetings of the Federal Open Market Committee are scheduled for 2025.
Ask a question
More guides on Finder
-
Axos Bank Bonus Offers in January 2025
The $500 Axos Bank bonus is now expired, but you can still earn $50 per qualifying referral, plus up to $400 with a new business account.
-
Discover® Savings Account Bonuses in January 2025
Discover only offers a bonus on its savings account, and it has a high deposit requirement. See how to get it here.
-
Upgrade Promotions and Bonus Offers of January 2025
Earn a checking account bonus of $200 by getting the Upgrade Card and making 3 qualifying transactions.
-
Fifth Third Bank promotions and bonus offers of January 2025
Fifth Third Bank currently offers a $300 checking account bonus when you open a new account and set up qualifying direct deposits.
-
Varo promotions and bonus offers of January 2025
Earn $25 with Varo by referring a friend. See the fine print on how to earn this bonus here.
-
PNC Bank promotions and bonus offers of January 2025
One of PNC’s best bonus offers is its $400 direct deposit bonus. But if you don’t meed the criteria, there are other ways to earn cash.
-
Chime Bonuses: $100 for a Referral
Chime offers a competitive $100 referral bonus and a $100 direct deposit bonus when you meet certain requirements. See details here.
-
SoFi promotions and bonus offers of January 2025
SoFi offers several bonus offers, including a direct deposit bonus, welcome offers and referral bonuses. See how to snag up to $300.
-
16 Best Bank Account Bonus Offers for January 2025
Instant sign-up bonuses with no deposit are not typically offered. However, these bank account bonuses have easy requirements.