The Federal Reserve lowered the target range for the federal funds rate to 1.75-2 percent during its September meeting, the second rate cut since the financial crisis, as inflation remains subdued amid heightened concerns about the economic outlook and ongoing trade tensions with China. Interest Rate in the United States averaged 5.65 percent from 1971 until 2019, reaching an all time high of 20 percent in March of 1980 and a record low of 0.25 percent in December of 2008.

Interest Rate in the United States is expected to be 2.00 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in the United States to stand at 2.00 in 12 months time. In the long-term, the United States Fed Funds Rate is projected to trend around 2.50 percent in 2020, according to our econometric models.

United States Fed Funds Rate
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Calendar GMT Actual Previous Consensus TEForecast
2019-05-01 06:00 PM Fed Interest Rate Decision 2.5% 2.5% 2.5% 2.5%
2019-06-19 06:00 PM Fed Interest Rate Decision 2.5% 2.5% 2.5% 2.5%
2019-07-31 06:00 PM Fed Interest Rate Decision 2.25% 2.5% 2.25% 2.25%
2019-09-18 06:00 PM Fed Interest Rate Decision 2% 2.25% 2% 2%
2019-09-23 01:50 PM Fed Williams Speech
2019-09-23 05:00 PM Fed Bullard Speech
2019-09-23 06:30 PM Fed Daly Speech



Fed Cuts Rates Despite Disagreement Among Policymakers

The Federal Reserve lowered the target range for the federal funds rate to 1.75-2 percent on a 7-3 vote during its September meeting. It was the second rate cut this year, amid global growth concerns and muted inflation pressures.

Median Fed policymaker projection is for no further rate cuts in 2019 but seven of 17 policymakers saw one more cut as appropriate.

GDP forecasts were raised to 2.2 percent in 2019 (vs 2.1 percent previously estimated) and 1.9 percent in 2021 (vs 1.8 percent), while that for 2020 was unchanged at 2.0 percent. Inflation expectations were seen at 1.5 percent in 2019, 1.9 percent in 2020 and 2.0 percent in 2021, matching June's projections.

Amid a breakdown this week in the overnight repurchase lending market, the Fed set interest on excess reserves rate at 1.80%, widening the spread from top of target range to 20 bp from 15 bp. 

FOMC Statement:

Information received since the Federal Open Market Committee met in July indicates that the labor market remains strong and that economic activity has been rising at a moderate rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low. Although household spending has been rising at a strong pace, business fixed investment and exports have weakened. On a 12-month basis, overall inflation and inflation for items other than food and energy are running below 2 percent. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. In light of the implications of global developments for the economic outlook as well as muted inflation pressures, the Committee decided to lower the target range for the federal funds rate to 1-3/4 to 2 percent. This action supports the Committee's view that sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective are the most likely outcomes, but uncertainties about this outlook remain. As the Committee contemplates the future path of the target range for the federal funds rate, it will continue to monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2 percent objective.

In determining the timing and size of future adjustments to the target range for the federal funds rate, the Committee will assess realized and expected economic conditions relative to its maximum employment objective and its symmetric 2 percent inflation objective. This assessment will take into account a wide range of information, including measures of labor market conditions, indicators of inflation pressures and inflation expectations, and readings on financial and international developments.

Voting for the monetary policy action were Jerome H. Powell, Chair, John C. Williams, Vice Chair; Michelle W. Bowman; Lael Brainard; Richard H. Clarida; Charles L. Evans; and Randal K. Quarles. Voting against the action were James Bullard, who preferred at this meeting to lower the target range for the federal funds rate to 1-1/2 to 1-3/4 percent; and Esther L. George and Eric S. Rosengren, who preferred to maintain the target range at 2 percent to 2-1/4 percent.


Federal Reserve | Joana Ferreira | joana.ferreira@tradingeconomics.com
9/18/2019 6:46:08 PM



United States Money Last Previous Highest Lowest Unit
Interest Rate 2.00 2.25 20.00 0.25 percent [+]
Money Supply M0 3271409.00 3260366.00 4075039.00 48362.00 USD Million [+]
Money Supply M1 3839.50 3852.40 3852.40 138.90 USD Billion [+]
Interbank Rate 2.16 2.16 10.63 0.22 percent [+]
Money Supply M2 14952.80 14872.10 14952.80 286.60 USD Billion [+]
Central Bank Balance Sheet 3726610.00 3721962.00 4473864.00 672444.00 USD Million [+]
Banks Balance Sheet 17461045.00 17420201.00 17523056.00 697581.70 USD Million [+]
Foreign Exchange Reserves 128845.00 128338.00 153075.00 12128.00 USD Million [+]
Loans to Private Sector 2363.08 2356.33 2363.08 13.65 USD Billion [+]
Foreign Bond Investment 10954.00 -7710.00 118012.00 -77351.00 USD Million [+]
Private Debt to GDP 196.70 201.80 212.90 156.20 percent [+]
Repo Rate 2.05 2.81 6.94 -0.01 [+]


United States Fed Funds Rate

In the United States, the authority to set interest rates is divided between the Board of Governors of the Federal Reserve (Board) and the Federal Open Market Committee (FOMC). The Board decides on changes in discount rates after recommendations submitted by one or more of the regional Federal Reserve Banks. The FOMC decides on open market operations, including the desired levels of central bank money or the desired federal funds market rate. This page provides the latest reported value for - United States Fed Funds Rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news. United States Fed Funds Rate - actual data, historical chart and calendar of releases - was last updated on September of 2019.

Actual Previous Highest Lowest Dates Unit Frequency
2.00 2.25 20.00 0.25 1971 - 2019 percent Daily




Country Last Previous
Argentina 82.79 Sep/19
Turkey 16.50 Sep/19
Mexico 8.00 Aug/19
Russia 7.00 Sep/19
South Africa 6.50 Sep/19
Brazil 5.50 Sep/19
India 5.40 Aug/19
Indonesia 5.25 Sep/19
China 4.20 Sep/19
Saudi Arabia 2.50 Sep/19
United States 2.00 Sep/19
Canada 1.75 Sep/19
Singapore 1.74 Aug/19
South Korea 1.50 Aug/19
Australia 1.00 Sep/19
United Kingdom 0.75 Sep/19
Euro Area 0.00 Sep/19
France 0.00 Sep/19
Germany 0.00 Sep/19
Italy 0.00 Sep/19
Netherlands 0.00 Sep/19
Spain 0.00 Sep/19
Japan -0.10 Sep/19
Switzerland -0.75 Sep/19


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