Macro
US federal funds rate chart
The effective federal funds rate is the volume-weighted median interest rate at which US depository institutions lend reserve balances to one another overnight. It's the rate Fed policy is designed to influence via its target range, and the closest real-world market rate to the Fed's own policy stance.
This chart plots the monthly average effective federal funds rate published by the Federal Reserve Board via FRED. It's an official statistical series, not a market instrument price.
Federal funds rate chart
FRED:FEDFUNDSEffective federal funds rate (FRED). Published monthly, so the chart shows the latest available reading rather than a live price.
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At a glance
| Full name | Effective Federal Funds Rate |
|---|---|
| Series code | FEDFUNDS |
| TradingView symbol | FRED:FEDFUNDS |
| Instrument type | Official statistical series |
| Official publisher | Federal Reserve Board / Federal Reserve Bank of New York (via FRED) |
| Unit of measurement | Percent per annum |
| Publication frequency | Monthly (average of daily observations) |
| Coverage | US interbank overnight reserve lending market |
| Revision policy | Represents a monthly average of daily figures; not subject to the kind of statistical revision applied to survey-based data |
| Data delay | Monthly average, published with a short lag; not a live or daily series |
What is Federal funds rate?
The Fed sets a target range for the federal funds rate, and the actual effective rate is determined by trading activity among banks lending reserves overnight, calculated daily by the Federal Reserve Bank of New York and averaged monthly for this series.
It differs from the Fed's target range itself: the effective rate is the observed market outcome, typically sitting within the announced target band rather than being an announced figure on its own.
How to read this chart
A rising line reflects a period in which the Fed has raised, or is in the process of raising, its target range; a falling line reflects rate cuts.
Because this is a monthly series, the chart shows a stepped rather than continuous line, with changes typically clustering around scheduled FOMC meeting dates.
Flat periods indicate the Fed is holding its target range unchanged between meetings.
What moves it?
- FOMC target range decisions
- The Federal Open Market Committee sets the target range at scheduled meetings based on its assessment of inflation and employment conditions relative to its mandate.
- Reserve market conditions
- The supply and demand for overnight reserves among banks, influenced by the Fed's balance sheet operations, determines where within the target range the effective rate actually settles.
- Inflation trends
- Persistent above- or below-target inflation is a primary input into the Committee's rate decisions.
- Labour market conditions
- Employment and wage trends factor into the Fed's dual mandate assessment alongside inflation.
Why people watch it
The federal funds rate anchors short-term borrowing costs throughout the US economy, including many variable-rate loans, credit lines and deposit rates, making it a key reference for corporate treasury and financial planning.
Businesses use its trend to anticipate the direction of short-term financing costs and to contextualise moves in other short-dated market rates.
Federal funds rate vs the US 2-year Treasury yield
The federal funds rate is the Fed's own overnight policy rate outcome, while the 2-year Treasury yield is a market-priced rate reflecting where investors expect the average federal funds rate to be over the next two years.
The 2-year yield often moves ahead of actual Fed decisions as expectations shift, whereas the federal funds rate itself only changes when the FOMC acts, making the two useful to read together to see whether market expectations and actual policy are aligned or diverging.
Compare the federal funds rate with the US 2-year Treasury yield
Frequently asked questions
Is the federal funds rate the same as the Fed's target range?
No. The target range is the band the FOMC announces; the effective federal funds rate is the actual market rate observed within that band, based on real overnight lending activity.
Why does this chart show a stepped line rather than a smooth curve?
Because the series is a monthly average, the chart naturally shows discrete steps between observations rather than continuous daily movement.
How quickly does a change in the target range show up in this series?
Effective rate changes typically occur close to the effective date of a new target range, since banks reprice overnight lending accordingly, but this chart reports the monthly average rather than daily detail.
Does the federal funds rate affect mortgage rates directly?
Not directly. Most fixed mortgage rates track longer-term yields such as the 10-year Treasury more closely, though the federal funds rate influences variable-rate products and the broader rate environment.
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Sources
Written and maintained by the StandardsDesk editorial team. Last reviewed 2026-08-06. The text here is deliberately evergreen: it is not rewritten every time the market moves, and no price or level is quoted anywhere outside the chart itself.
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