Effective Federal Funds Rate
This dataset tracks effective federal funds rate over time.
Latest Value
4.33
Year-over-Year Change
0.00%
Date Range
7/3/2000 - 8/11/2025
Summary
The Effective Federal Funds Rate (EFFR) represents the average interest rate at which banks lend to each other overnight in the federal funds market. This critical benchmark directly influences borrowing costs, monetary policy, and overall economic 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
The EFFR is a key indicator of monetary policy stance and reflects the Federal Reserve's efforts to manage economic stability and control inflation. Economists and financial professionals closely monitor this rate as a signal of broader economic trends and potential monetary interventions.
Methodology
The rate is calculated by the Federal Reserve Bank of New York using volume-weighted median of overnight federal funds transactions reported by major financial institutions.
Historical Context
Central banks and policymakers use the EFFR to implement monetary policy, influence lending rates, and manage economic growth and inflation.
Key Facts
- Represents the overnight lending rate between banks
- Directly influenced by Federal Reserve monetary policy
- Impacts consumer and business borrowing costs
FAQs
Q: How does the EFFR affect consumer loans?
A: Changes in the EFFR can influence interest rates for mortgages, credit cards, and other consumer loans. When the rate increases, borrowing becomes more expensive.
Q: Who determines the Federal Funds Rate?
A: The Federal Open Market Committee (FOMC) sets the target range for the federal funds rate during its regular meetings based on economic conditions.
Q: How often is the EFFR calculated?
A: The EFFR is calculated daily by the Federal Reserve Bank of New York using transaction data from the previous business day.
Q: What is the primary purpose of the EFFR?
A: The EFFR helps the Federal Reserve implement monetary policy by influencing short-term interest rates and managing overall economic stability.
Q: Are there limitations to using the EFFR?
A: While important, the EFFR is just one of many economic indicators and should be considered alongside other data points when analyzing economic conditions.
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Similar EFFR Trends
Citation
U.S. Federal Reserve, Effective Federal Funds Rate [EFFR], retrieved from FRED.
Last Checked: 8/1/2025