Federal Funds Rate History: 1954 to September 2026

The Fed raised rates by 0.25% at its sixth meeting of 2026 on Wednesday, September 16, 2026 to a target range of 3.75%-4%. This is the first rate hike since July 2023.

The decision came in a 12-0 vote, as uncertainty remains elevated partially owing to geopolitical developments.

Quick facts: Latest federal funds rate data at a glance

What did the Fed do at its July 2026 meeting?

The Federal Open Market Committee voted 12-0 to increase the target range to 3.75%-4%, an increase of 25 basis points, making it the first rate hike since July 2023.

How has the federal funds rate changed in the last 12 months?

Prior to the rate hike at the September 2026 meeting, the Fed has held rates for its last 5 consecutive meetings to start 2026, after cutting rates in back-to-back-to-back meetings in September, October and December 2025. Those three 25 basis point cuts brought the target range down from 4.25%-4.5% to the previous 3.5%-3.75%.

Before the September 2025 cut, there was a long string of holds, the Fed paused at the January, March, May, June and July 2025 meetings as it waited to see how tariffs and the labor market would shape inflation. The 2025 cutting cycle was preceded by three cuts at the end of 2024: a 50 basis point reduction in September, followed by 25 basis point cuts in November and December, bringing the target range from 5.25%-5.5% (held since July 2023) down to 4.25%-4.5% by the end of 2024.

The history of federal funds rate changes

Over the past few years we’ve seen a lot of movement in the Fed rate. The Fed raised rates four times in 2023, starting with consecutive 25 basis point increases in February, March and May 2023. Rates were then held in June and pushed higher again with a 25 basis point hike in July 2023, taking the target range to 5.25%-5.5%, a 22-year high.

The Fed raised rates seven times in 2022, the highest number of Fed rate hikes in a single year since 2005. While 2005 saw more Fed rate hikes in total (eight), the individual 2005 increases were just 25 basis points, whereas the changes in 2022 ranged from 25 to 75 basis points.

How does today’s rate compare to the past 8 years?

Since 2018, the average federal funds rate has been around 2.9%, which is well below where we are today. However, that period includes the historically low rates that followed COVID, with the Fed cutting the target range to 0%-0.25% in March 2020 and the effective rate hitting a record low of 0.05% for April and May 2020.

What is the highest the federal funds rate has ever been?

It’s not a great sign that the Fed rate is up compared to its average over the last decade or so. However, with the effective federal funds rate sitting at 3.63%, that is actually lower than the average rate since 1954 (4.59%). The all-time high was a monthly average of 22.36% in July 1981, when the Fed under Paul Volcker hiked aggressively to break double-digit inflation.

2026 FOMC meeting calendar

Eight meetings of the Federal Open Market Committee are scheduled for 2026:

Frequently asked questions

• What is the current federal funds rate?

  The current federal funds target range is 3.75%-4%, set at the FOMC's September 16, 2026 meeting. Previously, the Fed held in place at the January, March, April, June and July meetings at 3.5%-3.75%. The effective federal funds rate, the actual rate at which banks lend to each other overnight, was 3.63% as of Tuesday September 15, 2026.

• When is the next Fed meeting?

  The next FOMC meeting is scheduled for Wednesday, October 28, 2026, when the Fed will release its policy statement at 2:00 PM ET, followed by the chair's press conference at 2:30 PM ET.

• What is the federal funds rate?

  The federal funds rate is the interest rate at which depository institutions, banks and credit unions, lend their reserve balances to other depository institutions overnight, on an uncollateralized basis. The Federal Open Market Committee sets a target range eight times a year, and the Fed uses tools like the interest on reserve balances rate to steer the actual market rate (the effective federal funds rate) into that range.

• Why does the Fed change the federal funds rate?

  The Fed adjusts the federal funds rate to pursue its dual mandate from Congress: maximum employment and stable prices (defined as 2% inflation). When inflation runs hot, the Fed typically raises rates to slow the economy. When growth slows or unemployment rises, the Fed typically cuts rates to make borrowing cheaper and stimulate activity.

• How does the federal funds rate affect my savings and loans?

  The federal funds rate doesn't set the rates on consumer products directly, but it strongly influences them. When the Fed cuts rates, savings account yields, CD rates and money market rates typically fall, while variable-rate borrowing costs for products like credit cards, HELOCs, adjustable-rate mortgages tend to ease. Fixed mortgage rates follow longer-term Treasury yields more closely than the fed funds rate, so the relationship there is looser.

• What is the highest the federal funds rate has ever been?

  The highest monthly average effective federal funds rate since 1954 was 22.36% in Tuesday July 21, 1981%, during the period when Fed Chair Paul Volcker raised rates aggressively to break double-digit inflation.

• What is the lowest the federal funds rate has ever been?

  The lowest monthly average since 1954 was 0.04% on Thursday December 29, 2011%.

• How many times does the Fed meet each year?

  The FOMC holds eight regularly scheduled meetings per year, roughly every six weeks. Additional unscheduled meetings can be called if economic conditions require immediate action. Four of the eight meetings, March, June, September and December, are accompanied by a Summary of Economic Projections, including the "dot plot", showing each policymaker's rate forecast.

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Written by

Richard Laycock

Editorial & PR Lead

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Richard Laycock is Finder’s NYC-based lead editor & insights editor, spending the last decade data diving, writing and editing articles about all things personal finance. His musings can be found across the web including on NASDAQ, MoneyMag, Yahoo Finance and Travel Weekly. Richard studied Media at Macquarie University, including a semester abroad at The Missouri School of Journalism (MIZZOU). See full bio