Part of Global Central Bank Rates on BankofCanadaOdds.com.
American Fed Federal Funds Interest Rate
See how shifts in Federal Reserve policy compare with the Bank of Canada’s direction.
- Last updated: — policy rate data and historical series refreshed automatically each day.
Central banks use policy rates to influence inflation, growth, and financial conditions. This page shows the latest Federal Funds Rate level, the most recent change, and a historical timeline you can reference for context.
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Note: The Federal Funds Rate is the interest rate at which depository institutions trade federal funds (balances held at Federal Reserve Banks) with each other overnight. It is a key indicator of the health of the US economy.
What is the Federal Funds Rate?
The federal funds rate is the benchmark interest rate for overnight lending of reserve balances between banks in the United States. Rather than setting a single fixed rate, the Federal Reserve establishes a target range that guides short-term money market conditions.
This target range serves as the core signal of U.S. monetary policy and influences how liquidity is priced across the financial system.
Who decides the rate and why?
The federal funds rate target range is set by the Federal Open Market Committee (FOMC), the Federal Reserve’s main policy-making body. Decisions are made in pursuit of the Fed’s dual mandate: price stability and maximum employment over the longer run.
Rate decisions reflect how policymakers assess inflation trends, labor- market conditions, economic momentum, and financial stability risks at a given point in the cycle.
Why track global policy rates?
Currency movements
Policy-rate differences between countries can drive capital flows, influencing exchange rates as investors seek higher expected returns.
Credit and funding conditions
Central bank rates affect short-term funding costs, which feed through to loans, bonds, and broader credit markets.
Market valuation cycles
Shifts in policy rates change discount rates and growth expectations, influencing equities, housing markets, and commodity prices.
Why this matters for Borrowers, Investors & Others
U.S. rate decisions often affect CAD/USD dynamics and global financial conditions, shaping expectations for future moves by the Bank of Canada.
Related U.S. benchmark rates
Effective Federal Funds Rate (EFFR)
The Effective Federal Funds Rate reflects the actual overnight rate at which transactions occur in the federal funds market. It is calculated from real trades and provides a market-based view of conditions relative to the policy target range.
- Frequently Asked Questions
Central Bank Rates
FAQs
It is the benchmark rate for overnight lending of reserve balances between banks in the United States. The Federal Reserve sets a target range that guides broader financial conditions.
The target range represents the Federal Reserve’s policy objective, while the effective federal funds rate reflects the actual market rate observed in overnight transactions.
The Federal Open Market Committee typically meets eight times per year, though policy adjustments can occur between meetings if conditions require it.
Because policy rates influence short-term funding costs and investor expectations, which feed into borrowing rates across the financial system.
No. Mortgage rates are market-determined and reflect inflation expectations, economic outlook, and risk premiums, not a single policy decision.
U.S. monetary policy can influence exchange rates, global capital flows, and expectations for future Bank of Canada policy moves.
Rate tables and charts are updated to reflect the most recent policy decisions and effective dates available at the time of publication.
Some sources reference announcement dates or policy language, while others display effective dates. Differences usually reflect methodology rather than errors.
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