Federal Funds Rate (Target Range Upper Bound) vs M2 Money Supply (Year-over-Year Change)
Federal Funds Rate (Target Range Upper Bound) is currently 4.5% (flat 0.0%). M2 Money Supply (Year-over-Year Change) is currently 3.9% (up +0.2%).
| Metric | Federal Funds Rate (Target Range Upper Bound) | M2 Money Supply (Year-over-Year Change) |
|---|---|---|
| Current value | 4.5% | 3.9% |
| Previous reading | 4.5% | 3.7% |
| Change | 0.0% | +0.2% |
| Trend | flat | up |
| Frequency | As Announced | Monthly |
| Source | Federal Reserve | Federal Reserve |
| Last updated | 2026-03-19 | 2026-03-25 |
| Category | rates | money |
What Federal Funds Rate (Target Range Upper Bound) measures
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.
What M2 Money Supply (Year-over-Year Change) measures
M2 is a measure of the money supply that includes cash, checking deposits, savings deposits, money market funds, and small time deposits. Year-over-year changes in M2 are a leading indicator of inflation and economic activity.
M2 growth has recovered to 3.9% year-over-year after an unprecedented contraction in 2023 (the first in modern history). The normalization of money supply growth supports economic activity without being excessively inflationary. For executives, moderate M2 growth (3-5%) is consistent with a healthy economy — it means enough liquidity to support business activity without fueling the kind of excess that drove 2021-2022 inflation.
Frequently asked
Federal Funds Rate (Target Range Upper Bound) is currently 4.5%, flat 0.0% from the previous reading. Source: Federal Reserve, updated as announced.
M2 Money Supply (Year-over-Year Change) is currently 3.9%, up +0.2% from the previous reading. Source: Federal Reserve, updated monthly.
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, M2 growth has recovered to 3.9% year-over-year after an unprecedented contraction in 2023 (the first in modern history). The normalization of money supply growth supports economic activity without bei