The Fed raised rates on Wednesday for the first time since July 2023, after two years of cuts to 3.63%
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The story behind it
The Fed raised rates for the first time since 2023 and signalled another before Christmas Read the edition →On the calendar
The US releases that move markets, in New Zealand and Australian time. Economic calendar →
The story behind it
The Fed raised rates for the first time since 2023 and signalled another before Christmas Read the edition →On the calendar
The US releases that move markets, in New Zealand and Australian time. Economic calendar →What the chart shows
The Federal Open Market Committee lifted its target range to 3.75%–4.00% on Wednesday, a quarter-point rise approved 12 votes to nil. It is the first increase since July 2023.
Plotted here is the effective federal funds rate, a monthly average, from January 2022 to August 2026. It averaged 0.08% in January 2022, reached 5.33% in August 2023, held there into 2024, then fell through last year to 3.63% in August. Wednesday's decision is the turn at the right-hand end, and it is not in the August average.
Retail sales gave the committee its cover. The Commerce Department reported August sales up 1.2% on Wednesday morning, against the 0.7% economists surveyed by FactSet had expected.
The numbers
The effective federal funds rate, monthly average, January 2022 to August 2026. Wednesday's quarter-point rise to a 3.75%–4.00% target range is not yet in the series.
| US effective federal funds rate, monthly average (%) | |
|---|---|
| Jan 2022 | 0.08% |
| Feb 2022 | 0.08% |
| Mar 2022 | 0.20% |
| Apr 2022 | 0.33% |
| May 2022 | 0.77% |
| Jun 2022 | 1.21% |
| Jul 2022 | 1.68% |
| Aug 2022 | 2.33% |
| Sep 2022 | 2.56% |
| Oct 2022 | 3.08% |
| Nov 2022 | 3.78% |
| Dec 2022 | 4.10% |
| Jan 2023 | 4.33% |
| Feb 2023 | 4.57% |
| Mar 2023 | 4.65% |
| Apr 2023 | 4.83% |
| May 2023 | 5.06% |
| Jun 2023 | 5.08% |
| Jul 2023 | 5.12% |
| Aug 2023 | 5.33% |
| Sep 2023 | 5.33% |
| Oct 2023 | 5.33% |
| Nov 2023 | 5.33% |
| Dec 2023 | 5.33% |
| Jan 2024 | 5.33% |
| Feb 2024 | 5.33% |
| Mar 2024 | 5.33% |
| Apr 2024 | 5.33% |
| May 2024 | 5.33% |
| Jun 2024 | 5.33% |
| Jul 2024 | 5.33% |
| Aug 2024 | 5.33% |
| Sep 2024 | 5.13% |
| Oct 2024 | 4.83% |
| Nov 2024 | 4.64% |
| Dec 2024 | 4.48% |
| Jan 2025 | 4.33% |
| Feb 2025 | 4.33% |
| Mar 2025 | 4.33% |
| Apr 2025 | 4.33% |
| May 2025 | 4.33% |
| Jun 2025 | 4.33% |
| Jul 2025 | 4.33% |
| Aug 2025 | 4.33% |
| Sep 2025 | 4.22% |
| Oct 2025 | 4.09% |
| Nov 2025 | 3.88% |
| Dec 2025 | 3.72% |
| Jan 2026 | 3.64% |
| Feb 2026 | 3.64% |
| Mar 2026 | 3.64% |
| Apr 2026 | 3.64% |
| May 2026 | 3.63% |
| Jun 2026 | 3.63% |
| Jul 2026 | 3.63% |
| Aug 2026 | 3.63% |
56 rows: scroll the table for the rest.
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