Fed Funds Target Rate • FOMC Decision Tracker
Current Target Rate
4.5%Target Range: 4.25% - 4.50%
Rate Cycle Status
CYCLE PEAK
5.50%
Jul 2023
TOTAL CUTS
-100bp
Since Peak
CPI INFLATION
3.2%
Dec 2025
REAL RATE
+1.3%
Fed Rate - CPI
Jan 29, 2026
Mar 19, 2026
May 7, 2026
FOMC analysis, rate decision previews, and what it means for your portfolio.
The federal funds rate is the interest rate at which banks lend to each other overnight. It's the Federal Reserve's primary tool for monetary policy. When the Fed raises rates, borrowing becomes more expensive, slowing economic activity and inflation. When it cuts, borrowing becomes cheaper, stimulating growth.
The Fed rate directly affects: mortgage rates, car loans, credit cards, savings accounts, CDs, and bond yields. Higher rates benefit savers but hurt borrowers. Lower rates do the opposite. Stock valuations also compress when rates rise as future earnings become worth less in present value.
With inflation still above the 2% target, the Fed faces a dilemma: cut rates to ease financial conditions or hold to fight persistent price pressures. Markets expect 2-3 cuts in 2026, but the path depends heavily on inflation data and economic growth.