Federal Funds Rate
What is Federal Funds Rate?
The interest rate U.S. banks charge each other for overnight loans, targeted by the Federal Reserve.
Understanding Federal Funds Rate
The Federal Open Market Committee sets a target range for the federal funds rate, usually at eight scheduled meetings a year. It is the main lever of U.S. monetary policy.
Changes ripple out to other rates: the prime rate, credit card rates, savings yields, and, indirectly, mortgage rates and bond yields.
In 2026
As of late October 2026, the target range is 3.75% to 4.00%. The Fed raised it by a quarter point on September 16, 2026, its first increase since 2023, citing inflation driven by higher oil prices. It held the range steady on October 28, 2026, on a 10–2 vote, with two officials preferring another increase.