Federal Funds Rate History (1955 to 2025)
The federal funds rate is the overnight interest rate banks charge each other, steered by the Federal Reserve, and it is the base cost of money that filters into mortgage, credit-card, auto-loan and savings rates across the economy. This page shows the annual average of the effective rate for every year from 1955 to 2025, from the 16.38 percent peak in 1981 under Paul Volcker to the near-zero years after 2009 and 2020. The latest monthly reading is 3.63 percent (June 2026). Use the calculator below to see the annual interest a given rate produces on a balance, then read the table for the full history and the context behind each era.
Latest effective federal funds rate: 3.63% (June 2026). Annual averages have ranged from 0.08% (2021, lowest) to 16.38% (1981, highest). At 3.63%, a $10,000 balance earns about $363.00 a year in simple interest.
Federal funds rate by year, 1955 to 2025
Annual average of the effective federal funds rate from the Federal Reserve (FRED series FEDFUNDS).
| Year | Annual average rate |
|---|---|
| 2025 | 4.21% |
| 2024 | 5.14% |
| 2023 | 5.02% |
| 2022 | 1.68% |
| 2021 | 0.08% |
| 2020 | 0.38% |
| 2019 | 2.16% |
| 2018 | 1.83% |
| 2017 | 1.00% |
| 2016 | 0.40% |
| 2015 | 0.13% |
| 2014 | 0.09% |
| 2013 | 0.11% |
| 2012 | 0.14% |
| 2011 | 0.10% |
| 2010 | 0.18% |
| 2009 | 0.16% |
| 2008 | 1.93% |
| 2007 | 5.02% |
| 2006 | 4.96% |
| 2005 | 3.21% |
| 2004 | 1.35% |
| 2003 | 1.13% |
| 2002 | 1.67% |
| 2001 | 3.89% |
| 2000 | 6.24% |
| 1999 | 4.97% |
| 1998 | 5.35% |
| 1997 | 5.46% |
| 1996 | 5.30% |
| 1995 | 5.84% |
| 1994 | 4.20% |
| 1993 | 3.02% |
| 1992 | 3.52% |
| 1991 | 5.69% |
| 1990 | 8.10% |
| 1989 | 9.22% |
| 1988 | 7.57% |
| 1987 | 6.66% |
| 1986 | 6.81% |
| 1985 | 8.10% |
| 1984 | 10.23% |
| 1983 | 9.09% |
| 1982 | 12.26% |
| 1981 | 16.38% |
| 1980 | 13.36% |
| 1979 | 11.19% |
| 1978 | 7.93% |
| 1977 | 5.54% |
| 1976 | 5.05% |
| 1975 | 5.82% |
| 1974 | 10.50% |
| 1973 | 8.73% |
| 1972 | 4.43% |
| 1971 | 4.66% |
| 1970 | 7.18% |
| 1969 | 8.20% |
| 1968 | 5.66% |
| 1967 | 4.22% |
| 1966 | 5.11% |
| 1965 | 4.08% |
| 1964 | 3.50% |
| 1963 | 3.18% |
| 1962 | 2.71% |
| 1961 | 1.96% |
| 1960 | 3.22% |
| 1959 | 3.31% |
| 1958 | 1.57% |
| 1957 | 3.11% |
| 1956 | 2.73% |
| 1955 | 1.79% |
Annual averages of the effective rate. Since December 2008 the Fed sets a target range rather than a single point; the effective rate normally trades inside that range.
Reading the rate: three eras in one table
The seventy-year record splits into three very different regimes. The great inflation of 1979 to 1982 pushed the rate into double digits and to its 16.38 percent peak in 1981, the price the Volcker Fed paid to break inflation expectations, and the reason mortgages briefly carried rates no borrower today would recognise. The long moderation from the mid-1980s to 2007 saw the rate cycle between roughly 3 and 9 percent as the Fed leaned against booms and recessions. Then the post-2008 era pinned rates near zero for years at a time, first after the financial crisis and again in the pandemic, an experiment in ultra-cheap money that had no precedent in the earlier record.
What the annual averages smooth over is speed. The 2022 to 2023 tightening, from near zero to above 5 percent, was one of the fastest on record, and because so many borrowing costs are tied to this single rate, that pace is what strained regional banks and cooled the housing market. When you use this table, the level matters, but so does the change from one year to the next: a rate moving from 0.08 percent to 5 percent in two years reprices the whole economy, which is exactly what the 2021-to-2023 rows show.
Federal funds rate: frequently asked questions
What is the federal funds rate in 2026?
The effective federal funds rate was 3.63 percent as of June 2026 (the latest monthly figure). This is the interest rate at which banks lend reserve balances to each other overnight, and it is steered by the Federal Reserve's target range set by the Federal Open Market Committee. It sits well below the 5 percent-plus levels of 2023 and 2024, after the Fed began easing. The rate is set by policy, not by a formula, so it changes only when the FOMC decides.
When was the federal funds rate highest?
The highest annual average in this series was 16.38 percent in 1981, during the Federal Reserve's campaign under Chair Paul Volcker to break double-digit inflation. Rates stayed in double digits from 1979 to 1985 (except 1983). By contrast the rate was pinned near zero (about 0.1 to 0.2 percent) from 2009 to 2015 and again in 2020 to 2021 after the financial crisis and the pandemic.
How does the federal funds rate affect me?
It is the base cost of money in the economy, so it ripples into almost every other rate. When the fed funds rate rises, banks raise the prime rate, which lifts credit-card APRs, home-equity lines, auto loans and savings-account yields; mortgage rates move too, though they track longer-term bond yields more than the overnight rate. When the Fed cuts, borrowing gets cheaper and savings yields fall. This is why markets watch every FOMC meeting.
Is the federal funds rate a single number or a range?
Since December 2008 the Fed has set a target range (for example 5.25 to 5.50 percent) rather than a single point. The effective federal funds rate shown here is the actual volume-weighted average rate at which banks traded overnight, which normally sits inside that target range. The annual figures on this page are the yearly average of that effective rate.
Sources
- Rate series: Federal Reserve Bank of St. Louis (FRED), Effective Federal Funds Rate (FEDFUNDS), annual average.
- How the rate is set: Federal Reserve, Open Market Operations and the target range.
Reviewed by the CalculatorHub team, edited by James Graham, 28 July 2026. See our methodology. Annual averages of the effective rate; the current level changes when the FOMC meets.