Fed Rate Cut

Extracted Attributes

• Definition

  A reduction in the federal funds rate, which is the interest rate at which U.S. depository institutions lend reserve balances to each other overnight on an uncollateralized basis.

• Additional Tools

  Overnight reverse repurchase agreement facility, discount rate, and open market operations.

• Determining Body

  Federal Open Market Committee (FOMC)

• Primary Mechanism

  Adjustment of administratively set interest rates, mainly the interest on reserve balances (IORB).

• Typical FOMC Meeting Frequency

  Eight times a year, approximately seven weeks apart

Timeline

• FOMC made an unusually large cut of 75 basis points off the federal funds rate in response to market turmoil and the collapse of Bear Stearns. (Source: Wikipedia - History of Federal Open Market Committee actions)

  2008-03-18

• FOMC cut rates by 25 basis points. (Source: Wikipedia - History of Federal Open Market Committee actions)

  2008-04-30

• Fed cut interest rates by 25 basis points, setting the federal funds rate to 2.0% to 2.25%. This was part of a 'mid-cycle adjustment'. (Source: Forbes Advisor)

  2019-08-01

• Fed cut interest rates by 25 basis points, setting the federal funds rate to 1.75% to 2.0%. (Source: Forbes Advisor)

  2019-09-19

• Fed cut interest rates by 25 basis points, setting the federal funds rate to 1.50% to 1.75%. (Source: Forbes Advisor)

  2019-10-31

• An emergency 50-basis-point rate cut, setting the federal funds rate to 1.0% to 1.25%, in response to the risk the Coronavirus pandemic posed to the American economy. This cut was discussed in the All-In podcast as a significant event. (Source: Forbes Advisor, Wikipedia - History of Federal Open Market Committee actions, Related Documents)

  2020-03-03

• Fed cut rates by 100 basis points, setting the federal funds rate to 0% to 0.25%. (Source: Forbes Advisor)

  2020-03-16

• The Fed cut rates by a total of 1% in the second half of the year. (Source: US Bank)

  2024

• Markets imply an 87% chance of a 0.25% cut at the September meeting, with expectations of 1.5 to 2.5 cuts across the year's remaining three meetings. (Source: US Bank, Federal Reserve Board)

  2025-09-01

Federal funds rate

In the United States, the federal funds rate is the interest rate at which depository institutions (banks and credit unions) lend reserve balances to other depository institutions overnight on an uncollateralized basis. Reserve balances are amounts held at the Federal Reserve. Institutions with surplus balances in their accounts lend those balances to institutions in need of larger balances. The federal funds rate is an important benchmark in financial markets and central to the conduct of monetary policy in the United States as it influences a wide range of market interest rates. The effective federal funds rate (EFFR) is calculated as the effective median interest rate of overnight federal funds transactions during the previous business day. It is published daily by the Federal Reserve Bank of New York. The federal funds target range is determined by a meeting of the members of the Federal Open Market Committee (FOMC) which normally occurs eight times a year about seven weeks apart. The committee may also hold additional meetings and implement target rate changes outside of its normal schedule. The Federal Reserve adjusts its administratively set interest rates, mainly the interest on reserve balances (IORB), to bring the effective rate into the target range. Additional tools at the Fed's disposal are: the overnight reverse repurchase agreement facility, discount rate, and open market operations. The target range is chosen to influence market interest rates generally and in turn ultimately the level of activity, employment and inflation in the U.S. economy.

Web Search Results

• Federal Funds Rate History 1990 to 2025 – Forbes Advisor

  The Fed then cut rates by 25 basis points in each of the next two months, before choosing to maintain a range of 4.25% to 4.50% at its meetings in January, March and May 2025. 2020 Fed Rate Cuts: Coping with Covid-19 ---------------------------------------- | FOMC Meeting Date | Rate Change (bps) | Federal Funds Rate | | --- | --- | --- | | March 16, 2020 | -100 | 0% to 0.25% | | March 3, 2020 | -50 | 1.0% to 1.25% | Image 30: Left ArrowImage 31: Right Arrow See More See Less [...] While the economy was technically growing again by May 2020, after the shortest recession on record, the fallout from the economic measures to cope with the Covid-19 outbreak is still being felt today. 2019 Fed Rate Cuts: Mid-Cycle Adjustment ---------------------------------------- | FOMC Meeting Date | Rate Change (bps) | Federal Funds Rate | | --- | --- | --- | | October 31, 2019 | -25 | 1.50% to 1.75% | | Sept. 19, 2019 | -25 | 1.75% to 2.0% | | Aug. 1, 2019 | -25 | 2.0% to 2.25% | [...] Image 32: Left ArrowImage 33: Right Arrow See More See Less The Fed cut interest rates by a quarter of a percentage point three times in 2019 in what Powell called a “mid-cycle adjustment.” In plain English, the Fed was easing rates midway through the typical expansion-to-recession business cycle.

• History of Federal Open Market Committee actions - Wikipedia

  | March 18, 2008 | 2.25% | 2.50% | 8–2 | The FOMC made another unusually large cut, slashing 75 basis points off the federal funds rate in response to turmoil in the markets and the collapse of Bear Stearns. Despite some predicting an even larger 100 basis point cut, the markets rallied in response. Fisher and Plosser dissented, preferring a smaller cut. Official statement | [...] In an emergency decision the rate was cut by half a percentage point on March 3, 2020, to 1–1.25% in response to the risk that the Coronavirus pandemic in the United States poses to the American economy. It was the first emergency cut since the 2008 financial crisis.( ### March 2020 Coronavirus bond buying program [edit] [...] | August 5, 2008 | 2.00% | 2.25% | 10–1 | The Federal Open Market Committee decided today to keep its target for the federal funds rate at 2 percent. Official statement | | April 30, 2008 | 2.00% | 2.25% | 8–2 | The FOMC cut rates by 25 basis points. They drew back on their easing bias somewhat by removing "downside risks to growth remain" from its statement, but left no sign of a future pause to the interest rate cuts. Fisher and Plosser dissented, preferring no change. Official statement |

• Federal Reserve Calibrates Policy to Keep Inflation in Check

  The Fed will next consider rates at its September 2025 meeting, with markets implying an 87% chance of a 0.25% cut. In total, markets price in just under 2.5 rate cuts across the year’s remaining three remaining Fed meetings.3 Image 5: Chart depicts market projections for cumulative 2025 fed funds interest rate cuts. Source: U.S. Bank Asset Management Group Research, as of August 5, 2025. [...] Fed Chair Jerome Powell reiterated a wait-and-see approach to future potential rate reductions.1 This prompted investors to slightly reduce rate cut odds to 1.5 cuts across the remaining three meetings in 2025. However, two days later, weaker labor market data boosted rate cut expectations to 2.5 cuts in 2025. The updated official statement noted, “uncertainty about the economic outlook remains elevated,” while acknowledging moderating but still growing economic activity in the year’s first [...] half.2 The Fed held rates steady so far this year due primarily to tariff uncertainty, above-target inflation, and economic activity continuing to show modest expansion. The Fed previously cut rates by a total of 1% in 2024’s second half.

• United States Fed Funds Interest Rate - Trading Economics

  2.8% in the previous month. Meanwhile, labor market data continues to reflect a slowdown, but overall conditions remain robust. Investors are still pricing in a 25bps rate cut in September, with expectations of up to 100bps of easing over the next 12 months. At the same time, President Trump has been intensifying pressure on the Fed to cut rates to 1%. His repeated public criticism of the central bank and threats to dismiss Chair Powell have raised concerns about the erosion of the Fed’s [...] The Fed held rates steady at 4.25%–4.50% for a fifth straight meeting, as expected, but two governors dissented in favor of a cut—the first such dual dissent since 1993. Policymakers observed that, while fluctuations in net exports continue to influence the data, recent indicators point to a moderation in economic activity in H1—contrasting with earlier assessments that growth was proceeding 'at a solid pace'. The Fed also said that the unemployment rate remains low while inflation remains [...] The Fed held rates steady at 4.25%–4.50% for a fifth straight meeting, as expected, but two governors dissented in favor of a cut—the first such dual dissent since 1993. Policymakers observed that, while fluctuations in net exports continue to influence the data, recent indicators point to a moderat...ion in economic activity in H1—contrasting with earlier assessments that growth was proceeding 'at a solid pace'. The Fed also said that the unemployment rate remains low while inflation remains

• The Fed - Monetary Policy: - Federal Reserve Board

  expectations of one to two 25 basis point rate cuts by the end of the year. [...] The manager turned next to policy rate expectations, which held steady over the intermeeting period, consistent with a relatively stable macroeconomic outlook. The median modal path of the federal funds rate, as given in the Desk survey, was unchanged from the corresponding path in the June survey and continued to indicate expectations of two 25 basis point rate cuts in the second half of this year. Market-based measures of policy rate expectations were also little changed and indicated