Bank Prime Loan Rate
This dataset tracks bank prime loan rate over time.
Latest Value
7.50
Year-over-Year Change
0.00%
Date Range
8/4/1955 - 8/5/2025
Summary
The Bank Prime Loan Rate represents the interest rate that commercial banks charge their most creditworthy corporate customers for loans. This benchmark rate serves as a critical indicator of borrowing costs and overall credit market conditions in the United States.
Analysis & Context
This economic indicator provides valuable insights into current market conditions and economic trends. The data is updated regularly by the Federal Reserve and represents one of the most reliable sources for economic analysis.
Understanding this metric helps economists, policymakers, and investors make informed decisions about economic conditions and future trends. The interactive chart above allows you to explore historical patterns and identify key trends over time.
About This Dataset
Economists closely track this rate as a key metric of monetary policy and financial market health, reflecting the Federal Reserve's current stance on interest rates and lending conditions. The prime rate typically moves in direct correlation with the federal funds rate, providing insights into broader economic trends.
Methodology
The rate is calculated based on the interest rates of the 30 largest U.S. banks, with changes typically following adjustments to the federal funds rate.
Historical Context
Policymakers, investors, and financial analysts use this rate to assess credit market conditions, lending practices, and potential economic shifts.
Key Facts
- The prime rate directly influences interest rates for various consumer and business loans
- Changes in the prime rate typically lag behind Federal Reserve policy adjustments
- Historically, the rate has ranged from near-zero to over 20% depending on economic conditions
FAQs
Q: How does the prime rate affect consumer loans?
A: The prime rate serves as a baseline for many consumer loan products, including credit cards, home equity lines of credit, and adjustable-rate mortgages. When the prime rate increases, borrowing costs typically rise for consumers.
Q: Who determines the prime rate?
A: The prime rate is set by individual banks based on the federal funds rate, with most major banks typically moving in unison when adjusting their rates.
Q: How often does the prime rate change?
A: The prime rate can change whenever the Federal Reserve adjusts the federal funds rate, which occurs during Federal Open Market Committee (FOMC) meetings.
Q: How do businesses use the prime rate?
A: Many business loans and lines of credit are directly tied to the prime rate, with interest calculated as prime rate plus a specific percentage based on the borrower's creditworthiness.
Q: What are the limitations of the prime rate data?
A: The prime rate is a lagging indicator and may not immediately reflect the most current economic conditions. It represents only the most creditworthy borrowers and does not capture the full complexity of lending markets.
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Citation
U.S. Federal Reserve, Bank Prime Loan Rate [DPRIME], retrieved from FRED.
Last Checked: 8/1/2025