Effective federal funds rate

The overnight interest rate banks charge each other for reserves — the Federal Reserve’s main policy lever, not the President’s.

What it measures

The effective federal funds rate: the volume-weighted median rate on actual overnight loans between banks, averaged over the month.

How it is measured

The Federal Open Market Committee sets a target range; the New York Fed reports the rate that trades actually cleared at. Not seasonally adjusted — it is a policy rate, not a seasonal quantity.

Reading it over a presidential term

It is the series most likely to mislead in a scorecard. The Fed is independent, its moves usually respond to inflation and unemployment, and the President appoints governors but does not vote. The site publishes it because readers ask for it, and leaves both the direction and the attribution to you.

What it leaves out

A single overnight rate says nothing about the rates households and firms actually pay, or about the rest of the Fed’s tools — asset purchases and guidance about the future do not show up here.

Which direction counts as better?

High rates cost borrowers and reward savers, and are the standard response to inflation; low rates do the reverse and are the standard response to a weak economy. Neither level is good or bad on its own.

Chart this series · See it by president · Download the data · The source at FRED