The Federal Reserve held the target range for the federal funds rate at 2.25-2.5 percent but dropped a promise to be "patient" in adjusting rates and signaled possible rate cuts of as much as half a percentage point later this year. The policymakers left economic projections for growth and unemployment mostly unchanged but the headline inflation was forecasted at just 1.5% for the year, down from the 1.8% projected in March. Interest Rate in the United States averaged 5.67 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 2.25 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
2019-01-30 07:00 PM Fed Interest Rate Decision 2.5% 2.5% 2.5% 2.5%
2019-03-20 06:00 PM Fed Interest Rate Decision 2.5% 2.5% 2.5% 2.5%
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 2.5% 2.25%
2019-08-21 06:00 PM FOMC Minutes
2019-09-18 06:00 PM FOMC Economic Projections



Many Fed Policymakers See Near-Term Rate Cut: Minutes

Many Fed officials saw that the case for a somewhat more accommodative monetary policy had strengthened amid heightened uncertainties about the economic outlook and muted inflation pressures, minutes of the June meeting showed. Still, some participants agreed that there was not yet a strong case for a rate cut from current levels as they preferred to gather more information on the trajectory of the economy before concluding that a change in policy stance is warranted.

Excerpts from the minutes of the Federal Open Market Committee, June 18-19, 2019:

With regard to the outlook for monetary policy beyond this meeting, nearly all participants had revised down their assessment of the appropriate path for the federal funds rate over the projection period in their SEP submissions, and some had marked down their estimates of the longer-run normal level of the funds rate as well. Many participants indicated that the case for somewhat more accommodative policy had strengthened. Participants widely noted that the global developments that led to the heightened uncertainties about the economic outlook were quite recent. Many judged additional monetary policy accommodation would be warranted in the near term should these recent developments prove to be sustained and continue to weigh on the economic outlook. Several others noted that additional monetary policy accommodation could well be appropriate if incoming information showed further deterioration in the outlook. Participants stated a variety of reasons that would call for a lower path of the federal funds rate. Several participants noted that a near-term cut in the target range for the federal funds rate could help cushion the effects of possible future adverse shocks to the economy and, hence, was appropriate policy from a risk-management perspective. Some participants also noted that the continued shortfall in inflation risked a softening of inflation expectations that could slow the sustained return of inflation to the Committee's 2 percent objective. Several participants pointed out that they had revised down their estimates of the longer-run normal rate of unemployment and, as a result, saw a smaller upward contribution to inflation pressures from tight resource utilization than they had earlier. A few participants were concerned that inflation expectations had already moved below levels consistent with the Committee's symmetric 2 percent objective and that it was important to provide additional accommodation in the near term to bolster inflation expectations. A few participants judged that allowing inflation to run above 2 percent for some time could help strengthen the credibility of the Committee's commitment to its symmetric 2 percent inflation objective.

Some participants suggested that although they now judged that the appropriate path of the federal funds rate would follow a flatter trajectory than they had previously assumed, there was not yet a strong case for a rate cut from current levels. They preferred to gather more information on the trajectory of the economy before concluding that a change in policy stance is warranted. A few participants expressed the view that with the economy still in a favorable position in terms of the dual mandate, an easing of policy in an attempt to increase inflation a few tenths of a percentage point risked overheating the labor markets and fueling financial imbalances. Several participants observed that the trimmed mean measure of PCE price inflation constructed by the Federal Reserve Bank of Dallas had stayed near 2 percent recently, underscoring the view that the recent low readings on inflation will prove transitory.


Federal Reserve | Joana Ferreira | joana.ferreira@tradingeconomics.com
7/10/2019 6:19:39 PM


News

Powell Hints at Rate Cut Amid Increased Uncertainties
Uncertainties about the outlook have increased in recent months and weaker global growth could affect the US economy, Chair Jerome H. Powell said in prepared remarks to Congress, raising expectations that the central bank will be cutting interest rates by at least 25bps when it meets later this month.
Published on 2019-07-10

Fed is Insulated from Politics: Powell
The Fed is "insulated from short-term political pressures", Chair Jerome H. Powell said in a speech at the Council on Foreign Relations in New York, as policymakers face heavy criticism by President Donald Trump for having raised interest rates last year.
Published on 2019-06-25

Fed Holds Rates as Expected, Signals Rate Cuts Later this Year
The Federal Reserve held the target range for the federal funds rate at 2.25-2.5 percent and left its forecast for 2019 economic growth unchanged while revised higher for 2020. The Fed dropped a promise to be "patient" in adjusting rates and said that will act as appropriate to sustain the economic expansion. Fed officials now expect rate cuts in 2019.
Published on 2019-06-19

Fed is Ready to Act to Support Growth: Powell
The Fed "will act as appropriate to sustain the expansion, with a strong labor market and inflation near our symmetric 2 percent objective", Chair Jerome H. Powell said at a conference in Chicago. The chairman also noted that the proximity of interest rates to the effective lower bound (ELB) has become "the preeminent monetary policy challenge of our time", as it limits the central bank's ability to support growth by cutting rates.
Published on 2019-06-04



United States Money Last Previous Highest Lowest Unit
Interest Rate 2.50 2.50 20.00 0.25 percent [+]
Money Supply M0 3274900.00 3244515.00 4075039.00 48362.00 USD Million [+]
Money Supply M1 3831.70 3791.90 3831.70 138.90 USD Billion [+]
Interbank Rate 2.28 2.28 10.63 0.22 percent [+]
Money Supply M2 14755.10 14612.50 14755.10 286.60 USD Billion [+]
Central Bank Balance Sheet 3808157.00 3819964.00 4473864.00 672444.00 USD Million [+]
Banks Balance Sheet 17215637.00 17129807.00 17262875.00 697581.70 USD Million [+]
Foreign Exchange Reserves 126967.00 127264.00 153075.00 12128.00 USD Million [+]
Loans to Private Sector 2346.38 2346.96 2347.18 13.65 USD Billion [+]
Foreign Bond Investment -33837.00 16949.00 118012.00 -77351.00 USD Million [+]
Private Debt to GDP 196.70 201.80 212.90 156.20 percent [+]


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 July of 2019.

Actual Previous Highest Lowest Dates Unit Frequency
2.50 2.50 20.00 0.25 1971 - 2019 percent Daily




Country Last Previous
Argentina 58.72 Jul/19
Turkey 24.00 Jun/19
Mexico 8.25 Jul/19
Russia 7.50 Jun/19
Brazil 6.50 Jun/19
South Africa 6.50 Jul/19
India 5.75 Jul/19
Indonesia 5.75 Jul/19
China 4.35 Jun/19
Saudi Arabia 3.00 Jun/19
United States 2.50 Jun/19
Canada 1.75 Jul/19
Singapore 1.67 Jun/19
South Korea 1.50 Jul/19
Australia 1.00 Jul/19
United Kingdom 0.75 Jun/19
Euro Area 0.00 Jun/19
France 0.00 Jun/19
Germany 0.00 Jun/19
Italy 0.00 Jun/19
Netherlands 0.00 Jun/19
Spain 0.00 Jun/19
Japan -0.10 Jun/19
Switzerland -0.75 Jun/19


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