The effective federal funds rate, the FOMC upper target band, and where we sit in the current rate cycle. Sourced from FRED. Updated hourly.
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The effective fed funds rate is within 0.50 percentage points of six months ago. The FOMC is holding steady while watching CPI, PCE, payrolls, and unemployment for the next move.
The classification compares the effective rate today to the effective rate exactly six months ago. A trailing change of at least 0.50 percentage points in either direction is treated as a real cycle leg. Anything inside that band is a pause — the FOMC is holding while watching inflation and labor data.
Series: FRED FEDFUNDS (monthly average of the effective rate).
The Federal Open Market Committee has run roughly a dozen full hiking-then-cutting cycles since the effective fed funds rate first started trading in 1954. Each cycle has its own character. The Volcker-era tightening of 1979 to 1982 took the effective rate above 19% to break double-digit inflation, then unwound through the early 1980s as core CPI fell back. The Greenspan put-era cycles of the 1990s and 2000s were shorter and shallower — a few hundred basis points up, then back down once the next shock (LTCM, dot-com, housing) arrived. The Bernanke-Yellen post-GFC cycle was the longest hold in modern history: seven years pinned near zero between December 2008 and December 2015, then a slow march up to 2.5%.
The Powell-led 2022–2024 tightening cycle is the steepest in 40 years measured by speed. The committee took the upper target from 0.25% in March 2022 to 5.50% by July 2023 — 525 basis points in 16 months, faster on a per-month basis than any Volcker move. The pause that followed ran until September 2024, when the FOMC delivered a 50-basis-point cut, then 25-basis-point cuts in November and December 2024. By spring 2025 the upper target was at 4.50% and the cycle had clearly turned.
Why does the fed funds rate matter for everyday money decisions? Because almost every short-term US borrowing rate is a spread on top of it. The prime rate is fed funds upper target plus 3 percentage points by convention. HELOC rates, variable credit card APRs, and small business lines all reset within days of an FOMC move. Auto loan and personal loan offers follow within weeks. Savings APYs at top-tier online banks shadow it with a small lag — 5%+ APYs in 2023 became 4%+ in late 2024 because the underlying rate fell. The 30-year fixed mortgage rate is a longer-duration product anchored to the 10-year Treasury yield, but that yield itself prices in the market's expected path of fed funds over the coming decade.
The cycle phase classifier on this page is intentionally simple. A 0.50 percentage point trailing-six-month change is conservative: it skips months where a single 25-basis-point cut or hike is reversed at the next meeting, which keeps the label honest. It also matches the rule of thumb that most FOMC research uses internally when describing the stance of policy — “cumulative tightening this cycle” is almost always quoted in 50-basis-point increments because that is the unit at which transmission shows up in the macro data.
For longer-cycle context, the companion Kaggle dataset at kaggle.com/datasets/jeresalmisto/calcfi-prime-rate ships the full prime-rate series alongside fed funds, useful for studying the historical spread and modeling consumer credit transmission.
The federal funds rate is the interest rate at which depository institutions lend reserve balances to each other overnight. The Federal Open Market Committee (FOMC) sets a target range; the effective rate is the volume-weighted average of actual overnight transactions inside that range.
We compare the latest monthly effective fed funds rate (FRED series FEDFUNDS) to the value six months earlier. If the trailing six-month change is at least +0.50 percentage points, the phase is "hiking". If it is at most -0.50 points, it is "cutting". Anything in between is a "pause". The 0.50-point band filters out single-meeting noise without missing real cycle legs.
The FOMC sets a target range (for example 5.25%–5.50%). The upper target (DFEDTARU) is the top of that range — the rate the Fed wants. The effective rate (FEDFUNDS) is what actually trades, which can sit a few basis points below the upper bound because of arbitrage with the interest-on-reserve-balances (IORB) rate.
It anchors almost every short-term US borrowing cost. Prime rate moves with it one-for-one, so HELOCs, credit cards, and variable-rate student loans reprice quickly. Auto loans, personal loans, and savings APYs follow with a lag. 30-year mortgage rates track the 10-year Treasury, which in turn reacts to the path of fed funds policy.
The page re-fetches from FRED on an hourly ISR cycle. FEDFUNDS is a monthly series — new observations land on the first business day of the following month. DFEDTARU updates after every FOMC decision.