Explained · in 60 seconds
How the Fed sets interest rates, in 60 seconds
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Who decides?
The Federal Open Market Committee (FOMC) of the US central bank, with twelve voting members. It meets eight times a year.
What is decided?
A target range for the rate at which banks lend each other money overnight (the federal funds rate). The Fed steers the actual rate into that range with its own rates.
What does the Fed watch?
Two goals: stable prices (about 2% inflation) and maximum employment.
How does it reach you?
When the policy rate rises, credit cards, loans and new mortgages usually get more expensive – and savings accounts pay more. When it falls, the opposite happens.
The latest figure
The target range is currently 3.75–4.00% (since September 17, 2026); the next decision comes on October 28, 2026.
The figures: Fed funds rate · FOMC meeting dates
Frequently asked questions
How often does the Fed meet?
Eight times a year, roughly every six weeks.
What is the effective federal funds rate?
The rate banks actually pay each other overnight; the New York Fed calculates it every business day.
DESK is a research tool and not investment advice. Figures: official sources, see the linked data pages.
More figures and explainers
US inflation rate · US unemployment rate · Fed funds rate · ECB interest rate · US crude oil inventories · EUR/USD exchange rate · US GDP growth · Germany inflation rate · Euro area inflation rate · 10-year Treasury yield · Gold price · FOMC meeting dates · ECB meeting dates
Inflation, explained · Recession, explained · The euro, explained
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DESK is a research tool and not investment advice. Page generated: 2026-10-16.