What Is Federal Funds Rate (Target Range Upper Bound)?

3.8% sits in the lower portion of the recent historical range for Fed Rate. The reading is depressed relative to recent norms; the open question is whether this is a near-term cyclical low or the start of a more persistent shift.

Fed Rate has moved lower from 4.0% to 3.8% since the prior as announced release — a sharp move of -0.3%. Pair this with the related indicators below before drawing strong conclusions; isolated moves on a single release often look larger than they really are.

Interest-rate and yield indicators describe the cost of borrowing across the economy. The federal funds rate is set directly by the Federal Reserve; longer-term Treasury yields are set by the bond market and reflect investor expectations about future growth and inflation. See the FOMC for the current policy stance.

The federal funds rate is the interest rate at which banks lend to each other overnight. Set by the Federal Reserve's FOMC, it is the most important interest rate in the world — influencing everything from mortgage rates to corporate borrowing costs to the value of the dollar.

The Fed has held rates at 4.25-4.50% since December 2024, pausing after three cuts. For executives, this means borrowing costs remain elevated: corporate bond yields, commercial real estate financing, and revolving credit all price off the fed funds rate. The 'higher for longer' stance means capital-intensive projects need higher return hurdles. Companies with strong cash positions have an advantage over those reliant on debt financing.

The FOMC (Federal Open Market Committee) meets eight times per year to set the target range. The actual rate is maintained through open market operations — the Fed buys or sells Treasury securities to increase or decrease bank reserves, pushing the overnight lending rate toward the target.

ExecBolt does not estimate, model, or interpolate this value — every reading on this page is pulled directly from Federal Reserve (series DFEDTARU). For full sourcing standards and citation guidance, see the methodology page; for plain-language background on the underlying concept, see the learn library; for live cross-checks against related series, see the indicators dashboard.