The Fed Has Been Raising & Lowering Rates For Years – Fed Funds Rate History
Please choose any of the following articles below that interest you. Each article is listed under the month it was written. Articles written in prior months may still have educational interest.
The Federal Reserve attempts to address inflation and the employment market via increasing and decreasing short term rates via the Fed Funds, yet long term rates are established and set by the enormous fixed income market, which essentially determines nearly all other bond maturity prices and yields.
Some analysts and economists believe that the Fed may just be transitioning back to historical Fed Fund rates in the range of 2.00% – 3.00%, which is where rates hovered before the Covid-19 outbreak.
During the pandemic, the Federal Reserve shifted into crisis mode as millions of Americans weren’t working, businesses shuttered, and economic growth reversed into economic contraction. The Fed Funds Rate fell from 2.00% in 2019 to 0.0% in March 2020 in order to provide critical liquidity and attainable consumer loan rates to fortify the financial system. The rapid increase in the Fed Funds Rate during the post pandemic environment was meant to alleviate inflationary pressures and to protect the U.S. dollar from an earlier drop.
The question many analysts and economists have now is, how low will the Fed take the Fed Funds Rate, and how long will it take until it finds the optimal rate range.
Source: https://www.federalreserve.gov/monetarypolicy/openmarket.htm
Print Version: Fed Funds Rate History Oct 2024
