Effective Federal Funds Rate: 1st Percentile
This dataset tracks effective federal funds rate: 1st percentile over time.
Latest Value
4.31
Year-over-Year Change
0.00%
Date Range
3/1/2016 - 8/5/2025
Summary
The Effective Federal Funds Rate: 1st Percentile represents the lowest 1% of overnight lending rates between banks in the United States. This metric provides critical insight into the most extreme low-end borrowing conditions in the interbank market.
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
This data point reflects the lowest interest rates at which banks are willing to lend to each other overnight, representing the most conservative lending environment. Economists use this metric to understand potential liquidity constraints and extreme monetary policy conditions.
Methodology
The rate is calculated by the Federal Reserve Bank of New York by collecting transaction-level data from major financial institutions and identifying the first percentile of reported rates.
Historical Context
Policymakers and financial analysts use this trend to assess potential stress in short-term credit markets and evaluate the lower bounds of monetary policy implementation.
Key Facts
- Represents the lowest 1% of overnight lending rates
- Calculated using transaction-level data from financial institutions
- Provides insight into extreme lending conditions
FAQs
Q: What does the 1st percentile of the Federal Funds Rate indicate?
A: It shows the lowest interest rates in the interbank lending market, representing the most conservative borrowing conditions between banks.
Q: How is this rate different from the standard Federal Funds Rate?
A: While the standard rate represents the average, the 1st percentile captures the most extreme low-end lending rates in the market.
Q: Who calculates this rate?
A: The Federal Reserve Bank of New York collects and calculates this metric using transaction data from major financial institutions.
Q: Why do economists care about the 1st percentile rate?
A: It provides crucial insights into potential liquidity constraints and the lower bounds of monetary policy implementation.
Q: How frequently is this data updated?
A: The data is typically updated daily, reflecting the most recent overnight lending transactions between banks.
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Similar EFFR Trends
Citation
U.S. Federal Reserve, Effective Federal Funds Rate: 1st Percentile [EFFR1], retrieved from FRED.
Last Checked: 8/1/2025