Fed Funds Rate History: Its Highs, Lows, and Charts

The Federal Reserve tends to keep the federal funds rate within a 2% to 5% sweet spot that helps maintain a healthy economy, but there have been exceptions. The nation's benchmark rate has been increased well above that range at times to curb runaway inflation. It has also dipped well below 2% to stimulate economic growth.

Examining the Fed's changes to the fed funds rate provides insight into how the Fed has managed both inflation and recessions.

Lowest Fed Funds Rate

The all-time low for the federal funds rate is effectively zero. The Fed has twice lowered the rate to be 0.0% to 0.25%. The first time was during the financial crisis of 2008, and the Fed didn't resume raising rates until December 2015. 

The second time was in March 2020, as a result of the global health crisis. However, to curb the high inflation that came after, the Fed began raising interest rates in March 2022.

The lowest fed funds rate (before 2008) was in the range of 0.75% to 1.0% in 2003 in a move to combat the 2001 recession. There were fears that the economy was drifting toward deflation at that time.

Highest Fed Funds Rate

The fed funds rate reached a high of 20% in 1980 to combat double-digit inflation.

Inflation began to skyrocket beginning in March 1973 when President Richard Nixon disengaged the dollar from the gold standard. Inflation increased from 4.7% to 12.3% in December 1974. The Fed increased the fed funds rate from 7% in March to 11% by August.

Inflation continued to remain in the double digits through April 1975. The Fed increased the benchmark rate to 16% in March 1975, worsening the 1973 to 1975 recession. It then reversed course, dramatically lowering the rate to 5.25% by April 1975.

These sudden changes were part of a “stop-go” monetary policy. They weren't sustained enough to either end inflation or spur growth. Confused businesses kept prices high to stay ahead of the Fed's interest rate spikes, and this only made inflation worse. Fed leaders learned that managing inflation expectations was a critical factor in controlling inflation itself.

Federal Reserve chair Paul Volcker ended the Fed's stop-go policy in 1979. He instead raised rates and kept them there to finally end inflation. That created the 1980 recession, but it thoroughly ended double-digit inflation, which hasn't been a threat since.

Fed Funds Rate History

The charts below show the targeted fed funds rate changes since 1971. The Federal Open Market Committee (FOMC) didn't announce its target interest rate after meetings until October 1979. The Fed adjusted the rate through its open market operations. Banks were forced to guess what the rates would be as a result. The Fed tried to fight inflation without managing the expectations of inflation.

The Fed began targeting the money supply to fight inflation in 1979. The fed funds rate fluctuated a great deal between 1979 and 1982 as a result. Then in 1982, the Fed returned to targeting the fed funds rate.

The FOMC formally announced its policy changes for the first time in February 1994. Its announcements since then have made clear what it wants the interest rate to be. This policy manages expectations of inflation and minimizes disruptions caused by surprises from the Fed.

These are the target fed funds rates, along with the events that triggered the changes in cases where they did so. The Fed typically announces a range for its benchmark rate. The tables below show the high end of the range, while the low end is a quarter point lower. Each year also includes:

• The gross domestic product (GDP)
• The unemployment rate
• The inflation rate

Fed Chair Arthur Burns (January 1970–March 1978)

The GDP was 3.3% in 1971, the unemployment rate was 6.0%, and inflation was 4.4%.

Target Federal Funds Rates for 1971
Date	Fed Funds Rate	Event
Jan. 12	4.25%	Expansion
Feb. 9	3.75%	No notable event
March 9	5.0%	Inflation at 4.7% year-over-year
July 27	5.5%	Nixon shock; weakened gold standard; tariffs
Aug. 24	5.75%	Wage-price controls
Oct. 19	5.25%	The Fed lowered rates to boost growth
Nov. 16	5.0%	No notable event

The GDP was 5.3% in 1972. Unemployment was 5.2%, and inflation was 3.2%.

Target Federal Funds Rates for 1972
Date	Fed Funds Rate	Event
March 21	5.5%	Nixon devalued dollar, creating inflation
Dec. 19	5.75%	Fed raised rates to combat 3.4% YoY inflation

The GDP was 5.6% in 1973, unemployment was 4.9%, and inflation was 6.2%.

Target Federal Funds Rates for 1973
Date	Fed Funds Rate	Event
Jan. 19	6.0%	Stagflation
Feb. 23	6.5%	No notable event
March 20	7.0%	No notable event
April 17	7.25%	Inflation at 5.1%
May 15	7.5%	Inflation at 5.5%
June 19	8.5%	Inflation at 6.0%
July 17	10.25%	Recession
Aug. 21	11.0%	OPEC embargo worsened inflation in October

The GDP was -0.5% in 1974, unemployment was 7.2%, and inflation was 11.0%.

Target Federal Funds Rates for 1974
Date	Fed Funds Rate	Event
Feb. 20	9.0%	Recession
March 19	10.0%	Embargo ended in March
April 16	11.0%	Fed raised rates to stop inflation
July 16	13.0%	Inflation at 11.5%; Ford replaced Nixon in August
Nov. 19	9.25%	Recession combined with 12.2% YoY inflation
Dec. 17	8.0%	The Fed lowered rates to end recession

The GDP was -0.2% in 1975, unemployment was 8.2%, and inflation was 9.1%.

Target Federal Funds Rates for 1975
Date	Fed Funds Rate	Event
Jan. 21	7.0%	No notable event
Feb. 19	6.0%	Economy contracted 4.8% in Q1 with inflation at 11.2%
March 21	5.5%	Recession ended
April 15	5.25%	Inflation at 10.2%, Unemployment at 9%
June 17	6.25%	Inflation at 9.4%
Sept. 16	6.5%	Inflation fell to 7.9%

The GDP was 5.4% in 1976, unemployment was 7.8%, and inflation was 5.8%.

Target Federal Funds Rates for 1976
Date	Fed Funds Rate	Event
Jan. 20	4.75%	Rate lowered from October through January
May 18	5.5%	Raised in April and May
Oct. 19	5.0%	Official end of gold standard
Nov. 16	4.75%	Lowered from July–November

The GDP was 4.6% in 1977, unemployment was 6.4%, and inflation was 6.5%.

Target Federal Funds Rates for 1977
Date	Fed Funds Rate	Event
Aug. 16	6.0%	Inflation rose to 7% in April
Sept. 20	6.25%	Inflation at 6.6%
Oct. 18	6.5%	Raised again in September and October

Fed Chair William Miller (March 1978–August 1979)

The GDP was 5.5% in 1978, unemployment was 6.0%, and inflation was 7.6%.

Target Federal Funds Rates for 1978
Date	Fed Funds Rate	Event
Jan. 17	6.75%	Inflation rose to 6.8%
April 19	7.0%	No notable event
May 17	7.5%	No notable event
June 21	7.75%	No notable event
Aug. 16	8.0%	Inflation rose to 7.8%
Sept. 20	8.5%	No notable event
Oct. 18	9.0%	Inflation at 8.9%
Nov. 21	9.75%	No notable event
Dec. 20	10.0%	Raised each month from April through December

Fed Chair Paul Volcker (August 1979–August 1987)

The GDP was 3.2% in 1979, unemployment was 6.0%, and inflation was 11.3%.

Target Federal Funds Rates for 1979
Date	Fed Funds Rate	Event
April 17	10.25%	Inflation at 10.5%
July 20	10.5%	No notable event
Aug. 15	11.0%	No notable event
Sept. 19	11.5%	Inflation rose to 12.2%
Oct. 8	13.0%	The Fed began targeting the money supply
Oct. 22	15.5%	Conference call raised rates 2.5 points
Nov. 20	14.0%	Inflation at 12.6%

The GDP was -0.3% in 1980, unemployment was 7.2%, and inflation was 13.5%.

Target Federal Funds Rates for 1980
Date	Fed Funds Rate	Event
Feb. 15	15.0%	Recession began in January, Inflation at 14.2%
March 18	20.0%	No notable event
May 15	11.5%	Conference calls on April 29 and May 6 lowered rates
June 5	8.5%	Recession ended in July
Aug. 7	10.0%	The Fed raised rates; inflation at 12.9%
Sept. 16	11.0%	No notable event
Oct. 13	12.0%	No notable event
Nov. 21	18.0%	Inflation eased to 12.6%
Dec. 5	20.0%	Conference call
Dec. 29	18.0%	Lowered two points

The GDP was 2.5% in 1981, unemployment was 8.5%, and inflation was 10.3%.

Target Federal Funds Rates for 1981
Date	Fed Funds Rate	Event
Feb. 3	20.0%	Reagan took office; Volcker raised rates again
April 28	16.0%	Conference call lowered rates
May 18	20.0%	Recession began in July
Nov. 17	13.0%	Gradually lowered rates over six months
Dec. 22	12.0%	Inflation at 8.9%

The GDP was -1.8% in 1982, unemployment was 10.8%, and inflation was 6.2%. Data from 1982–2007 is from the Federal Reserve Bank of St. Louis' discontinued target fed funds rate series.

Target Federal Funds Rates for 1982
Date	Fed Funds Rate	Event
March 30	15.0%	Gradually raised rates three points over four months
July 15	13.0%	Conference call; gradually lowered rates
Aug. 24	9.5%	Gradually lowered rates
Nov. 16	9.5%	Recession ended
Dec. 21	8.5%	Inflation at 3.8%

The GDP was 4.6% in 1983, unemployment was 8.3%, and inflation was 3.2%.

Target Federal Funds Rates for 1983
Date	Fed Funds Rate	Event
May 24	8.63%	Gradually raised rates over five months
Aug. 23	9.75%	Raised from May to August
Oct. 4	9.38%	Lowered from August to October

The GDP was 7.2% in 1984, unemployment was 7.3%, and inflation was 4.3%.

Target Federal Funds Rates for 1984
Date	Fed Funds Rate	Event
March 29	10.5%	Raised rates again
July 17	11.0%.	No notable event
Aug. 21	11.5%	Raised from March to August
Oct. 2	11%	Began lowering again
Nov. 7	10%	No notable event
Dec. 18	8.75%	Lowered from September to December

The GDP was 4.2% in 1985, unemployment was 7.0%, and inflation was 3.6%.

Target Federal Funds Rates for 1985
Date	Fed Funds Rate	Event
March 26	8.38%	Raised from February to mid-March
May 20	7.75%	Began lowering again
Aug. 20	7.75%	Raised again
Dec. 17	8.0%	Lowered again

The GDP was 3.5% in 1986, unemployment was 6.6%, and inflation was 1.9%.

Target Federal Funds Rates for 1986
Date	Fed Funds Rate	Event
April 18	7.31%	Continued lowering rates
Aug. 21	5.88%	Lowered until August
Dec. 16	5.88%	Began raising rates again

Fed Chair Alan Greenspan (August 1987–January 2006)

The GDP was 3.5% in 1987, unemployment was 5.7%, and inflation was 3.6%.

Target Federal Funds Rates for 1987
Date	Fed Funds Rate	Event
May 19	6.5%	Continued raising rates to fight inflation
Sept. 22	7.25%	No notable event
Nov. 4	6.81%	Lowered after Black Monday stock market crash

The GDP was 4.2% in 1988, unemployment was 5.3%, and inflation was 4.1%.

Target Federal Funds Rates for 1988
Date	Fed Funds Rate	Event
Feb. 10	6.25%	Continued lowering
March 29	6.5%	Began raising to fight inflation
Aug. 16	8.13%	No notable event
Dec. 14	8.38%	No notable event

The GDP was 3.7% in 1989, unemployment was 5.4%, and inflation was 4.8%.

Target Federal Funds Rate for 1989
Date	Fed Funds Rate	Event
Dec. 19	8.5%	S&L crisis; The Fed lowered rates to calm markets

The GDP was 1.9% in 1990, unemployment was 6.3%, and inflation was 5.4%.

Target Federal Funds Rates for 1990
Date	Fed Funds Rate	Event
July 13	8.25%	Recession began in July
Oct. 29	7.75%	Continued lowering rates to boost economy despite inflation
Nov. 14	7.5%	No notable event
Dec. 7	7.25%	Conference call
Dec. 18	7.25%	Economy contracted 3.6% in Q4

The GDP was -0.1% in 1991, unemployment was 7.3%, and inflation was 4.2%.

Target Federal Funds Rates for 1991
Date	Fed Funds Rate	Event
Jan. 9	6.75%	Economy contracted 1.9%
Feb. 1	6.25%	No notable event
March 8	6.0%	Recession ended
April 30	5.75%	Conference call
Aug. 6	5.5%	No notable event
Sept. 13	5.25%	Conference call
Oct. 31	5.0%	Conference call
Nov. 6	4.75%	Fed continued lowering rates to fight unemployment
Dec. 6	4.5%	No notable event
Dec. 20	4.0%	No notable event

The GDP was 3.5% in 1992, unemployment was 7.4%, and inflation was 3.0%.

Target Federal Funds Rates for 1992
Date	Fed Funds Rate	Event
April 9	3.75%	The Fed lowered rates to fight unemployment
July 2	3.25%	No notable event
Sept. 4	3.0%	No notable event

The GDP was 4.0% in 1994, unemployment was 5.5%, and inflation was 2.6%.

Target Federal Funds Rates for 1994
Date	Fed Funds Rate	Event
Feb. 4	3.25%	Fed raised rates to keep economy healthy
March 22	3.5%	No notable event
April 18	3.75%	Conference call
May 17	4.25%	No notable event
Aug. 16	4.75%	No notable event
Nov. 15	5.5%	Raised rates

The GDP was 2.7% in 1995, unemployment was 5.6%, and inflation was 2.8%.

Target Federal Funds Rates for 1995
Date	Fed Funds Rate	Event
Feb. 1	6.0%	Raised rates
July 6	5.75%	Lowered rates
Dec. 19	5.5%	No notable event

The GDP was 3.8% in 1996, unemployment was 5.4%, and inflation was 3.0%.

Target Federal Funds Rate for 1996
Date	Fed Funds Rate	Event
Jan. 31	5.25%	Kept rates low despite inflation

The GDP was 4.4% in 1997, unemployment was 4.7%, and inflation was 2.3%. 

Target Federal Funds Rate for 1997
Date	Fed Funds Rate	Event
March 25	5.5%	Raised rates despite low inflation

The GDP was 4.5% in 1998, unemployment was 4.4%, and inflation was 1.6%.

Target Federal Funds Rates for 1998
Date	Fed Funds Rate	Date
Sept. 29	5.25%	Lowered rates to fight LTCM crisis
Oct. 15	5.0%	No notable event
Nov. 17	4.75%	No notable event

The GDP was 4.8% in 1999, unemployment was 4.0%, and inflation was 2.2%.

Target Federal Funds Rates for 1999
Date	Fed Funds Rate	Event
June 30	5.0%	Raised rates because economy was doing well
Aug. 24	5.25%	No notable event
Nov. 16	5.5%	No notable event

The GDP was 4.1% in 2000, unemployment was 3.9%, and inflation was 3.4%.

Target Federal Funds Rates for 2000
Date	Fed Funds Rate	Event
Feb. 2	5.75%	No notable event
March 21	6.0%	No notable event
May 16	6.5%	Raised rates despite stock market drop

The GDP was 1.0% in 2001, unemployment was 5.7%, and inflation was 2.8%.

Target Federal Funds Rates for 2001
Date	Fed Funds Rate	Event
Jan. 3	6.0%	No notable event
Jan. 31	5.5%	Bush took office
March 20	5.0%	Recession
April 18	4.5%	No notable event
May 15	4.0%	No notable event
June 27	3.75%	EGTRRA tax rebate enacted
Aug. 21	3.5%	No notable event
Sept. 17	3.0%	9/11 attacks
Oct. 2	2.5%	Afghanistan War
Nov. 6	2.0%	Recession ended
Dec. 11	1.75%	No notable event

The GDP was 1.7% in 2002, unemployment was 6.0%, and inflation was 1.6%. The following tables have data taken from The Federal Reserve.

Target Federal Funds Rate for 2002
Date	Fed Funds Rate	Event
Nov. 6	1.25%	The Fed lowered rates to fight sluggish growth

The GDP was 2.8% in 2003. Unemployment was 5.7%, and inflation was 2.3%.

Date	Fed Funds Rate	Event
June 25	1.00%	JGTRRA tax cuts enacted to spur growth

In 2004, the GDP was 3.9%, unemployment was 5.4%, and inflation was 2.7%.

Target Federal Funds Rates for 2004
Date	Fed Funds Rate	Event
June 30	1.03%	Low rates pushed interest-only loans
Aug. 10	1.5%	No notable event
Sept. 21	1.75%	No notable event
Nov. 10	2.0%	No notable event
Dec. 14	2.25%	No notable event

In 2005, the GDP was 3.5%, unemployment was 4.9%, and inflation was 3.4%.

Target Federal Funds Rates for 2005
Date	Fed Funds Rate	Event
Feb. 2	2.5%	No notable event
March 22	2.75%	No notable event
May 3	3.0%	No notable event
June 30	3.25%	No notable event
Aug. 9	3.5%	No notable event
Sept. 20	3.75%	No notable event
Nov. 1	4.0%	No notable event
Dec. 13	4.25%	No notable event

Fed Chair Ben Bernanke (February 2006–January 2014)

In 2006, the GDP was 2.8%, unemployment was 4.4%, and inflation was 3.2%. 

Target Federal Funds Rates for 2006
Date	Fed Funds Rate	Event
Jan. 31	4.5%	Raised to cool housing market bubble
March 28	4.75%	Higher rates caused more mortgage defaults
May 10	5.0%	No notable event
June 29	5.25%	No notable event

In 2007, GDP was 2.0%, unemployment was 5.0%, and inflation was 2.8%.

Target Federal Funds Rates for 2007
Date	Fed Funds Rate	Event
Sept. 18	4.75%	Home sales fell
Oct. 31	4.5%	No notable event
Dec. 11	4.25%	LIBOR rose; stock market peaked; recession began

In 2008, The GDP was 0.1%, unemployment was 7.3%, and inflation was 3.8%. As of Dec. 16, 2008, the target funds rate became a range, represented in the tables by the upper limit.

Target Federal Funds Rates for 2008
Date	Fed Funds Rate	Event
Jan. 22	3.5%	No notable event
Jan. 30	3.0%	No notable event
March 18	2.25%	Bear Stearns bailout
April 30	2.0%	No notable event
Oct. 8	1.5%	Lehman failed; bank bailout approved
Nov. 29	1.0%	AIG bailout
Dec. 16	0.25%	Effectively zero

Fed Chair Janet Yellen (February 2014–February 2018)

In 2015, GDP was 2.3%, unemployment was 5.0%, and inflation was 0.1%. 

Target Federal Funds Rate for 2015
Date	Fed Funds Rate	Event
Dec. 17	0.50%	Growth stabilized; Fed began raising rates

In 2016, the GDP was 1.7% in 2016, unemployment was 4.7%, and inflation was 1.3%.

Target Federal Funds Rate for 2016
Date	Fed Funds Rate	Event
Dec. 15	0.75%	Fed maintained steady increase in rates

In 2017, the GDP was 2.3%, unemployment was 4.1%, and inflation was 2.1%.

Target Federal Funds Rates for 2017
Date	Fed Funds Rate	Event
March 16	1.00%	Continued raising rates
June 15	1.25%	No notable event
Dec. 14	1.5%	No notable event

Fed Chair Jerome Powell (Since February 2018)

In 2018, the GDP was 2.9%, unemployment was 3.9%, inflation was 2.4%.

Target Federal Funds Rates for 2018
Date	Fed Funds Rate	Event
March 22	1.75%	No notable event
June 14	2.00%	No notable event
Sept. 27	2.25%	No notable event
Dec. 20	2.50%	Fed promised to stop raising rates

In 2019, the GDP was 2.3%, unemployment was 3.5%, and inflation was 1.9%.

Target Federal Funds Rates for 2019
Date	Fed Funds Rate	Event
Aug. 1	2.25%	Lowered rates despite growth
Sept. 19	2.00%	Fed was concerned about slowing growth
Oct. 31	1.75%	Slow global growth and muted inflation

In 2020, the GDP decreased 3.4%, inflation was 1.2%, and unemployment was 6.7%.

Target Federal Funds Rates for 2020
Date	Fed Funds Rate	Event
March 3	1.25%	Coronavirus pandemic
April 29	0.25%	Effectively zero
June 10	0.25%	Effectively zero
July 29	0.25%	Effectively zero
Sept. 16	0.25%	Effectively zero
Nov. 5	0.25%	Effectively zero
Dec. 16	0.25%	Effectively zero

GDP increased by 6.9% in 2021, the largest one-year jump since 1984; on the other hand, inflation also increased by 7%, the largest increase since 1982.

Target Federal Funds Rates for 2021
Date	Fed Funds Rate	Event
Jan. 27	0.25%	Effectively zero
March 17	0.25%	Effectively zero
April 28	0.25%	Effectively zero
June 16	0.25%	Effectively zero
July 28	0.25%	Effectively zero
Sept. 22	0.25%	Effectively zero
Nov. 4	0.25%	Effectively zero
Dec. 15	0.25%	Effectively zero

Inflation continued to run hot at the beginning of 2022. Year-over-year inflation was 7.9% in February.

Target Federal Funds Rates for 2022
Date	Fed Funds Rate	Event
Jan. 26	0.25%	Effectively Zero
March 16	0.5%	Inflation
May 4	1%	Russian invasion of Ukraine; China brings back COVID-19 lockdowns
June 15	1.75%	Inflation reached 40-year high
July 27	2.5%	Inflation continued to grow
Sept. 21	3.25%	Inflation is still impacting Americans
Nov. 2	4%	Inflation is still impacting Americans
Dec. 14	4.5%	Fed slows its fight against inflation

In early 2023, inflation was still above the Fed's ideal range of 2%, reaching 6% year-over-year in February.

Target Federal Funds Rate for 2023
Date	Fed Funds Rate	Event
Feb. 1	4.75%	Fed still aiming to bring inflation to 2%
March 22	5%	Regional banking crisis
May 3	5.25%	Economic growth continues but slows
June 14	5.25%	Annual inflation hits lowest level in two years
July 26	5.5%	Inflation rises again
Sept. 20	5.5%	No notable event
Nov. 1	5.5%	No notable event
Dec. 13	5.5%	No notable event

Target Federal Funds Rate for 2024
Date	Fed Funds Rate	Event
Jan. 31	5.5%	Consumer sentiment hits highest level in 2.5 years
March 20	5.5%	No notable event
May 1	5.5%	Analysts forecast rate cuts by year-end
June 12	5.5%	No notable event

This information is pulled from the Federal Reserve when it releases the monetary policy stance of the Federal Open Market Committee (eight times a year).

Frequently Asked Questions (FAQs)