Bank holds as expected: At its meeting on 21 November, the Central Bank of the Republic of Turkey (CBRT) decided...
Federal Funds Target Rate in United States
The US Federal Reserve's policy rates from 2013 to 2022 saw a cycle of hiking, lowering, and again hiking. Post-financial crisis, rates were kept near zero until 2015, when the Fed started gradual hikes as the economy improved. However, in response to the COVID-19 pandemic, rates were quickly cut back to near zero in 2020. By 2022, in the face of rising inflation, the Fed initiated a series of rate hikes, marking a significant shift towards tighter monetary policy.
The Federal Funds Target Rate ended 2022 at 4.50%, up from the 0.25% end-2021 value and from the reading of 0.25% a decade earlier. For reference, the average policy rate in Major Economies was 3.50% at end-2022. For more interest rate information, visit our dedicated page.
United States Interest Rate Chart
Note: This chart displays Policy Interest Rate (%) for United States from 2014 to 2023.
Source: Macrobond.
United States Interest Rate Data
| 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|
| Federal Funds Target Rate (%, eop) | 1.75 | 0.25 | 0.25 | 4.50 | 5.50 |
| Secured Overnight Financing Rate (%, eop) | 1.55 | 0.07 | 0.05 | 4.30 | 5.38 |
| 10-Year Bond Yield (%, eop) | 1.92 | 0.93 | 1.52 | 3.88 | 3.88 |
Central Bank decides to decrease rates again in November
Latest bank decision: At its meeting on 7 November, the Central Bank decided to lower the target range for the federal funds rate by 0.25 percentage points to 4.50–4-75%. This took total rate cuts this year to 0.75 percentage points.
Monetary policy drivers: The key domestic factors influencing the Central Bank's decision were the fact that inflation has fallen persistently in recent months towards the Fed’s 2.0% target range, plus the general easing of labor market conditions including a slight increase in the unemployment rate.
Policy outlook: The Central Bank is likely to continue cutting rates going forward, though the pace and extent of easing could be significantly affected by the new Trump administration’s trade and fiscal policy. If Trump cuts taxes and/or hikes tariffs, as he has pledged to do, this would put upward pressure on inflation and could cause the Fed to slow or pause rate cuts. On the flipside, there is the outside chance that Trump tries to reduce the political independence of the Fed, which could lead to faster-than-expected rate cuts.
Panelist insight: Giving their take on the outlook, Nomura analysts said: “We continue to expect 25bp rate cuts in December and March, with a skip in January. We anticipate tariff-driven inflation by mid-2025 will lead to a prolonged pause in the Fed’s easing cycle.” United Overseas Bank’s Alvin Liew said: “For now, we still expect one more 25-bps cut for the Dec 24 FOMC to bring rates to 4.25%-4.50% by end-2024, followed by 100 bps of cuts in 2025 (one 25-bps cuts per quarter) with one final 25-bps rate cut to bring us to the terminal rate of 3.25% by 1Q 2026.”
Consensus Forecasts and Projections for the next ten years
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects American interest rate projections for the next ten years from a panel of 43 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for American interest rate.
Download one of our sample reports to visualize what a Consensus Forecast is and see our American interest rate projections.
Want to get access to the full dataset of American interest rate forecasts? Send an email to info@focus-economics.com.
Latest Global Monetary Policy News
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