Fed Funds Rate History: Its Highs, Lows, and Charts

How the Benchmark Has Changed Through History

The highest and lowest Fed funds rates: it was raised to 20% to combat double digit inflation in 1979 and 1980. It was lowered to 0% to 0.25% in March 2020 in response to the coronavirus outbreak.

Image by Maddy Price © The Balance 2020

The Federal Reserve tends to keep the fed funds rate within a 2.0% to 5.0% sweet spot that maintains a healthy economy, but there have been exceptions.

There were times in history when the nation's benchmark rate was increased well above the sweet spot to curb runaway inflation. It's also dipped well below 2% to stimulate economic growth.

Examining the Fed's changes to the fed funds rate provides insight into how the Fed has managed both inflation and recession.

Lowest Fed Funds Rate

The all-time low is effectively zero. The Fed lowered the rate to a range of 0.0% to 0.25% twice. The first was during the financial crisis of 2008, and the Fed didn't resume raising rates until December 2015. 

The second time was in March 2020. The Fed announced it would keep rates in that range until 2023.

Prior to 2008, the lowest fed funds rate was a range of 0.75% to 1.0% in 2003. This was a move to combat the 2001 recession. At that time, there were fears that the economy was drifting toward deflation. That's when prices keep falling, convincing buyers to delay purchases to get the lower price.

Highest Fed Funds Rate

The fed funds rate reached a high of 20.0% in 1980 to combat double-digit inflation.

Inflation began to skyrocket starting in March 1973 when President Richard Nixon disengaged the dollar from the gold standard. Inflation almost tripled from 4.6% to 12.3% in December 1974. The Fed doubled the fed funds rate from 7.0% in March to 11.0% by August (see tables below).

Inflation continued to remain in the double digits through April 1975. The Fed increased the benchmark rate to 13.0% in July 1974. This worsened the 1973-1975 recession. The Fed reversed course, dramatically lowering the rate to 5.25% by April 1975.

These sudden changes, part of “stop-go” monetary policy, were not sustained enough to either end inflation or spur growth. As a result, confused businesses kept prices high to stay ahead of the Fed's interest rate spikes. That only made inflation worse. Fed leaders learned that managing inflation expectations was a critical factor in controlling inflation itself.

In 1979, Federal Reserve chair Paul Volcker ended the Fed's stop-go policy. He raised rates and kept them there to finally end inflation. That created the 1980 recession but thoroughly ended double-digit inflation. It hasn't been a threat since.

Fed Funds Rate History

The charts below show the targeted fed funds rate changes since 1971. Until October 1979, the Federal Open Market Committee (FOMC) didn't announce its target interest rate after meetings. The Fed adjusted the rate through its open market operations. As a result, banks were forced to guess what the rates would be. The Fed tried to fight inflation without managing the expectations of inflation.

In 1979, the Fed began targeting the money supply to fight inflation. As a result, the fed funds rate fluctuated a great deal between 1979 and 1982. In 1982, the Fed returned to targeting the fed funds rate specifically.

In February 1994, the FOMC formally announced its policy changes for the first time. Since then, its announcements make it clear what it wants the interest rate to be. This manages expectations of inflation and minimizes disruptions caused by surprises from the Fed.

Here are the target fed funds rates along with the event that triggered the change. The Fed typically announces a range for its benchmark rate. The tables below show the high end of the range. The low end is a quarter-point lower.

Fed Chair Arthur Burns (January 1970-March 1978)

In 1971, the GDP was 3.3%, unemployment was 6.0%, and inflation was 3.3%.

Date Fed Funds Rate Event
Jan 12 4.25% Expansion
Feb 9 3.75%  
Mar 9 5.0% Inflation at 4.7% year-over-year
Jul 27 5.5% Nixon shock; Weakened gold standard; Tariffs
Aug 24 5.75% Wage-price controls
Oct 19 5.25% Fed lowered rate to boost growth
Nov 16 5.0%  

In 1972, GDP was 5.3%, unemployment was 5.2%, and inflation was 3.4%.

Date Fed Funds Rate Event
Mar 21 5.5% Nixon devalued dollar, creating inflation
Dec 19 5.75% Fed raised rate to combat 3.4% YOY inflation

In 1973, GDP was 5.6%, unemployment was 4.9%, and inflation was 8.7%.

Date Fed Funds Rate Event
Jan 16 6.0% Stagflation
Feb 13 6.5%  
Mar 20 7.0%  
Apr 17 7.25% Inflation at 5.1%
May 15 7.75% Inflation at 5.5%
Jun 19 8.5% Inflation at 6.0%
Jul 17 10.25% Recession
Aug 21 11.0% OPEC embargo worsened inflation in October

In 1974, GDP was -0.5%, unemployment was 7.2%, and inflation was 12.3%.

Date Fed Funds Rate Event
Feb 20 9.0% Recession
Mar 19 10.0% Embargo ended in March
Apr 16 11.0% Fed raised rates to stop inflation
Jul 16 13.0% Inflation at 11.5%, Ford replaced Nixon in August
Nov 19 9.25% Recession combined with 12.2% YOY inflation. 
Dec 17 8.0% Fed lowered rates to end recession. 

In 1975, GDP was -0.2%, unemployment was 8.2%, and inflation was 6.9%.

Date Fed Funds Rate Event
Jan 21 7.0%  
Feb 19 6.0% Economy contracted 4.8% in Q1 with inflation at 11.2%
Mar 18 5.75% Recession ended
Apr 15 5.25% Inflation at 10.2%, Unemployment at 9%
Jun 17 6.25% Inflation at 9.4%
Sep 16 6.5% Inflation falls to 7.9%

In 1976, GDP was 5.4%, unemployment was 7.8%, and inflation was 4.9%.

Date Fed Funds Rate Event
Jan 20 4.75% Rate lowered from October through January
May 18 5.5% Raised in April and May
Oct 19 5.0% Official end of gold standard
Nov 16 4.75% Lowered from July–November

In 1977, GDP was 4.6%, unemployment was 6.4%, and inflation was 6.7%.

Date Fed Funds Rate Event
Aug 16 6.0% Inflation rises to 7% in April
Sep 20 6.25% Inflation at 6.6%
Oct 18 6.5% Raised again in September and October

Fed Chair William Miller (March 1978-August 1979)

In 1978, the GDP was 5.5%, unemployment was 6.0%, and inflation was 9.0%.

Date Fed Funds Rate Event
Jan 17 6.75% Inflation rises to 6.8%
Apr 18 7.0%  
May 16 7.5%  
Jun 20 7.75%  
Aug 15 8.0% Inflation rises to 7.8%
Sep 19 8.5%  
Oct 17 9.0% Inflation at 8.9%
Nov 21 9.75%  
Dec 19 10.0% Raised each month from April through December

Fed Chair Paul Volcker (August 1979-August 1987)

In 1979, GDP was 3.2%, unemployment was 6.0%, and inflation was 13.3%.

Date Fed Funds Rate Event
Apr 17 10.25% Inflation at 10.5%
Jul 11 10.5%  
Aug 14 11.0%  
Sep 18 11.5% Inflation rises to 12.2%
Oct 6 13.0% The Fed began targeting the money supply
Oct 22 15.5% Conference call raised rates 2.5 points
Nov 20 14.0% Inflation at 12.6%

In 1980, GDP was -0.3%, unemployment was 7.2%, and inflation was 12.5%.

Date Fed Funds Rate Event
Feb 5 15.0% Recession began in January, Inflation at 14.2%
Mar 18 20.0%  
May 20 11.5% Conference calls on April 29 and May 6 lowered rates
Jun 5 8.5% Recession ends in July
Aug 12 10.0% Raised rates back up, Inflation at 12.9%
Sep 16 11.0%  
Oct 21 12.0%  
Nov 18 18.0% Inflation eases to 12.6%
Dec 12 20.0% Conference call
Dec 19 18.0% Lowered two points

In 1981, GDP was 2.5%, unemployment was 8.5%, and inflation was 8.9%.

Date Fed Funds Rate Event
Feb 3 20.0% Reagan took office; Volcker raised rates again
Apr 28 16.0% Conference call lowered rates
May 18 20.0% Recession began in July
Nov 17 13.0% Gradually lowered rates over 6 months
Dec 22 12.0% Inflation at 8.9%

In 1982, GDP was -1.8%, unemployment was 10.8%, and inflation was 3.8%.

Date Fed Funds Rate Event
Mar 30 15.0% Gradually raised rates 3 points over 4 months
Jul 15 13.0% Conference call; Gradually lowered rates
Aug 24 9.5% Gradually lowered rates
Nov 16 9.0% Recession ends
Dec 21 8.5% Inflation at 3.8%

In 1983, GDP was 4.6%, unemployment was 8.3%, and inflation was 3.8%.

Date Fed Funds rate Event
May 24 9.5% Gradually raised rates over 5 months
Aug 23 9.75% Raised from May to August
Oct 4 9.5% Lowered from August to October

In 1984, GDP was 7.2%, unemployment was 7.3%, and inflation was 3.9%.

Date Fed Funds Rate Event
Mar 27 10.5% Raised rates again
Jul 17 11.5%.  
Aug 21 11.75% Raised from March to August
Oct 2 10% Began lowering again
Nov 7 9.5%  
Dec 18 8.25% Lowered from September to December

In 1985, GDP was 4.2%, unemployment was 7.0%, and inflation was 3.8%.

Date Fed Funds Rate Event
Mar 26 9.0% Raised from February to mid-March
May 21 7.75% Began lowering again
Aug 20 8.0% Raised again
Dec 17 7.75% Lowered again

In 1986, GDP was 3.5%, unemployment was 6.6%, and inflation was 1.1%.

Date Fed Funds Rate Event
Apr 1 6.75% Continued lowering rates
Aug 19 5.75% Lowered until August
Dec 16 6.0% Began raising rates again

Fed Chair Alan Greenspan (August 1987-January 2006)

In 1987, GDP was 3.5%, unemployment was 5.7%, and inflation was 4.4%.

Date Fed Funds Rate Event
May 19 6.75% Continued raising rates to fight inflation
Sept 22 7.25%  
Oct 30 6.75% Lowered after Black Monday stock market crash

In 1988, GDP was 4.2%, unemployment was 5.3%, and inflation was 4.4%.

Date Fed Funds Rate Event
Feb 10 6.5% Continued lowering
Mar 29 7.5% Began raising to fight inflation
Aug 16 8.25%  
Dec 14 9.75%  

In 1989, GDP was 3.7%, unemployment was 5.4%, and inflation was 4.6%.

Date Fed Funds Rate Event
Dec 19 8.25% S&L crisis, Fed lowered rates to calm markets

In 1990, GDP was 1.9%, unemployment was 6.3%, and inflation was 6.1%.

Date Fed Funds Rate Event
Jul 13 8.0% Recession began in July
Oct 29 7.75% Continued lowering rates to boost economy despite inflation
Nov 13 7.5%  
Dec 7 7.25% Conference call
Dec 18 7.0% Economy contracted 3.6% in Q4

In 1991, GDP was -0.1%, unemployment was 7.3%, and inflation was 3.1%.

Date Fed Funds Rate Event
Jan 9 6.75% Economy contracted 1.9%
Feb 1 6.25%  
Mar 8 6.0% Recession ended
Apr 30 5.75% Conference call
Aug 6 5.5%  
Sep 13 5.25% Conference call
Oct 31 5.0% Conference call
Nov 6 4.75% Fed continued lowering rates to fight unemployment
Dec 6 4.5%  
Dec 20 4.0%  

In 1992, GDP was 3.5%, unemployment was 7.4%, and inflation was 2.9%.

Date Fed Funds Rate Event
Apr 9 3.75% Fed lowered rates to fight unemployment
Jul 2 3.25%  
Sep 4 3.0%  

In 1993, GDP was 2.8%, unemployment was 6.5%, and inflation was 2.7%. 

  • Clinton took office in 1993. Fed made no changes.

In 1994, GDP was 4.0%, unemployment was 5.5%, and inflation was 2.7%.

Date Fed Funds Rate Event

Feb 4

3.25% Fed raised rates to keep economy healthy
Mar 22 3.5%  
Apr 18 3.75% Conference call
May 17 4.25%  
Aug 16 4.75%  
Nov 15 5.5% Raised rates

In 1995, GDP was 2.7%, unemployment was 5.6%, and inflation was 2.5%.

Date Fed Funds Rate Event
Feb 1 6.0% Raised rates
Jul 6 5.75% Lowered rates
Dec 19 5.5%  

In 1996, GDP was 3.8%, unemployment was 5.4%, and inflation was 3.3%.

Date Fed Funds Rate Event
Jan 31 5.25% Kept rates low despite inflation

In 1997, GDP was 4.4%, unemployment was 4.7%, and inflation was 1.7%. 

Date Fed Funds Rate Event
Mar 25 5.5% Raised rates despite low inflation

In 1998, GDP was 4.5%, unemployment was 4.4%, and inflation was 1.6%.

Date Fed Funds Rate Date
Sep 29 5.25% Lowered rates to fight LTCM crisis
Oct 15 5.0%  
Nov 17 4.75%  

In 1999, GDP was 4.8%, unemployment was 4.0%, and inflation was 2.7%.

Date Fed Funds Rate Event
Jun 30 5.0% Raised rates because economy was doing well
Aug 24 5.25%  
Nov 16 5.5%  

In 2000, GDP was 4.1%, unemployment was 3.9%, and inflation was 3.4%.

Date Fed Funds Rate Event
Feb 2 5.75%  
Mar 21 6.0%  
May 16 6.5% Raised rates despite stock market drop

In 2001, GDP was 1.0%, unemployment was 5.7%, and inflation was 1.6%.

Date Fed Funds Rate Event
Jan 3 6.0%  
Jan 31 5.5% Bush took office
Mar 20 5.0% Recession
Apr 18 4.5%  
May 15 4.0%  
Jun 27 3.75% EGTTRA tax rebate enacted
Aug 21 3.5%  
Sep 17 3.0% 9/11 attacks
Oct 2 2.5% Afghanistan War
Nov 6 2.0% Recession ended
Dec 11 1.75%  

In 2002, GDP was 1.7%, unemployment was 6.0%, and inflation was 2.4%.

Date Fed Funds Rate Event
Nov 6 1.25% Fed lowered rates to fight sluggish growth

In 2003: GDP was 2.9%, unemployment was 5.7%, and inflation was 1.9%.

Date Fed Funds Rate Event
Jun 25 1.0% JGTRRA tax cuts enacted to spur growth.

In 2004, GDP was 3.8%, unemployment was 5.4%, and inflation was 3.3%.

Date Fed Funds Rate Event
Jun 30 1.25% Low rates pushed interest-only loans
Aug 10 1.5%  
Sep 21 1.75%  
Nov 10 2.0%  
Dec 14 2.25%  

In 2005, GDP was 3.5%, unemployment was 4.9%, and inflation was 3.4%.

Date Fed Funds Rate Event
Feb 2 2.5%  
Mar 22 2.75%  
May 3 3.0%  
Jun 30 3.25%  
Aug 9 3.5%  
Sep 20 3.75%  
Nov 1 4.0%  
Dec 13 4.25%  

Fed Chair Ben Bernanke (February 2006-January 2014)

In 2006, GDP was 2.9%, unemployment was 4.4%, and inflation was 2.5%. 

Date Fed Funds Rate Event
Jan 31 4.5% Raised to cool housing market bubble
Mar 28 4.75% Higher rates caused more mortgage defaults
May 10 5.0%  
Jun 29 5.25%  

In 2007, GDP was 1.9%, unemployment was 5.0%, and inflation was 4.1%.

Date Fed Funds Rate Event
Sep 18 4.75% Home sales fell
Oct 31 4.5%  
Dec 11 4.25% LIBOR rose; Stock market peaked; Recession began

In 2008, GDP was -0.1%, unemployment was 7.3%, and inflation was 0.1%.

Date Fed Funds Rate Event
Jan 22 3.5%  
Jan 30 3.0% Tax rebate
Mar 18 2.25% Bear Stearns bailout
Apr 30 2.0%  
Oct 8 1.5% Lehman fails; Bank bailout approved
Oct 29 1.0% AIG bailout
Dec 16 0.25% Effectively zero

Between 2008 and 2015, the Fed kept the rate at zero. The recession ended in June 2009.

Fed Chair Janet Yellen (February 2014-February 2018)

In 2015, GDP was 3.1%, unemployment was 5.0%, and inflation was 0.7%. 

Date Fed Funds Rate Event
Dec 17 0.5% Growth stabilized, so Fed began raising rates

In 2016, GDP was 1.7%, unemployment was 4.7%, and inflation was 2.1%.

Date Fed Funds Rate Event
Dec 15 0.75% Fed maintained steady increase in rates

In 2017, GDP was 2.3%, unemployment was 4.1%, and inflation was 2.1%.

Date Fed Funds Rate Event
Mar 16 1.0% Continued raising rates
Jun 15 1.25%  
Dec 14 1.5%  

Fed Chair Jerome Powell (Since February 2018)

In 2018, GDP was 3.0%, unemployment was 3.9%, inflation was 1.9%.

Date Fed Funds Rate Event
Mar 22 1.75%  
Jun 14 2.0%  
Sep 27 2.25%  
Dec 20 2.5% Fed promised to stop raising rates

In 2019, GDP was 2.2%, unemployment was 3.5%, and inflation was 2.3%.

Date Fed Funds Rate Event
Aug 1 2.25% Lowered rates despite growth
Sep 19 2.0% Fed was concerned about slowing growth
Oct 31 1.75% Slow global growth and muted inflation

2020

Date Fed Funds Rate Event
March 3 1.25% Coronavirus pandemic
March 16 0.25% Effectively zero

Sources for the information above include the Board of Governors of the Federal Reserve System, the Federal Reserve Bank of St. Louis, the Federal Reserve Bank of New York, the Bureau of Economic Analysis, and the Bureau of Labor Statistics.

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