Update: The Federal Open Market Committee voted to maintain the federal funds rate at its June meeting.
The current Fed rate is 3.50% to 3.75%. That’s according to the Federal Open Market Committee (FOMC), the monetary policymaking part of the Federal Reserve that holds eight regularly scheduled meetings a year to set the federal funds rate.
What is the Fed funds rate?
The federal funds rate, or Fed rate, is the interest rate that U.S. banks pay one another to borrow or loan money overnight. It also affects interest rates on everyday consumer products, such as credit cards or mortgages.
Since banks hold reserves to conduct everyday business such as having enough liquidity and clearing payments, banks that need more reserves often borrow money from other banks.
June FOMC meeting: No rate change
NerdWallet senior economist Elizabeth Renter had this to say about the outcome of the June meeting of the FOMC:
The statement from the FOMC today was noticeably more abrupt than those under former Fed chair Jerome Powell. New chair Kevin Warsh alluded to changing communication practices at the Fed and it looks as if this has begun.
The interest rate decision, to keep things where they are, comes as no surprise. Inflation is higher than ideal and the labor market is steady — there’s no reason for lowering rates. If anything, the case is stronger now to raise rates than it was a month ago. FOMC meeting participants increased their projections of inflation, core inflation and the federal funds rate compared with where they had them in March. There’s little debate that inflationary risks are higher now.
This meeting will have little impact on households, with rates remaining unchanged amid a high inflation environment. But for those who watch the Fed closely, it’s the beginning of what could be very different messaging around monetary policy in action.
Warsh confirmed as Fed chair
On May 12, Kevin Warsh was confirmed by Congress as Fed chair for a 4-year term. The vote was split along party lines with just one Democrat crossing the aisle to approve President Donald Trump’s nominee.
Warsh succeeds Jerome Powell, a frequent target of Trump over the past year as the president pushed for aggressive rate cuts. But it remains unclear whether Warsh will steer the Fed in a more hawkish direction amid an uneasy economic climate marked by stubborn inflation and escalating conflict in the Middle East spiking oil prices.
On May 8, analysts at Bank of America said they no longer expect a rate cut until the second half of 2027, a significant shift from their previous forecast for a September cut.
Read insight from NerdWallet's senior economist Elizabeth Renter as to how the likely incoming Fed Chair Kevin Warsh may approach his new role.
When is the next Fed meeting?
The Federal Open Market Committee's next meeting is July 28-29, 2026. This is the next scheduled time that the FOMC could modify the federal funds rate.
Who sets the Federal funds rate?
The Federal Open Market Committee sets the federal funds rate. The FOMC sets the target rate range, and sets the Fed rate to be aligned with that target range.
What is the current Fed interest rate?
Right now, the Fed interest rate is 3.50% to 3.75%. The FOMC set the rate at its meeting on Dec. 9-10, 2025.
Here are the most recent Fed rates from regularly scheduled FOMC meetings:
| FOMC meeting dates | Rate change | Fed rate (as a target range) |
|---|---|---|
| June 16-17, 2026. | None. | 3.50% to 3.75%. |
| April 28-29, 2026. | None. | 3.50% to 3.75%. |
| March 17-18, 2026. | None. | 3.50% to 3.75%. |
| Jan. 27-28, 2026. | None. | 3.50% to 3.75%. |
+ Click to see 2025 Fed rates and rate decreases
| FOMC meeting dates | Rate change | Fed rate (as a target range) |
|---|---|---|
| Jan. 27-28, 2026. | None. | 3.50% to 3.75%. |
| Dec. 9-10, 2025. | Decrease of 25 basis points (or 0.25 percentage point). | 3.50% to 3.75%. |
| Oct. 28-29, 2025. | Decrease of 25 basis points (or 0.25 percentage point). | 3.75% to 4.00%. |
| Sept. 16-17, 2025. | Decrease of 25 basis points (or 0.25 percentage point). | 4.00% to 4.25%. |
| July 29-30, 2025. | None. | 4.25% to 4.50%. |
| June 17-18, 2025. | None. | 4.25% to 4.50%. |
| May 6-7, 2025. | None. | 4.25% to 4.50%. |
| March 18-19, 2025. | None. | 4.25% to 4.50%. |
| Jan. 28-29, 2025. | None. | 4.25% to 4.50%. |
+ Click to see 2024 Fed rates and rate decreases
| FOMC meeting dates | Rate change | Fed rate (as a target range) |
|---|---|---|
| Dec. 17-18, 2024. | Decrease of 25 basis points (or 0.25 percentage point). | 4.25% - 4.50%. |
| Nov. 6-7, 2024. | Decrease of 25 basis points (or 0.25 percentage point). | 4.50% - 4.75%. |
| Sept. 17-18, 2024. | Decrease of 50 basis points (or 0.50 percentage point). | 4.75% - 5.00%. |
| July 30-31, 2024. | None. | 5.25% - 5.50%. |
| June 11-12, 2024. | None. | 5.25% - 5.50%. |
| April 30-May 1, 2024. | None. | 5.25% - 5.50%. |
| March 19-20, 2024. | None. | 5.25% - 5.50%. |
| Jan. 30-31, 2024. | None. | 5.25% - 5.50%. |
+ Click to see 2023 Fed rate increases
| FOMC meeting dates | Rate change | Fed rate (as a target range) |
|---|---|---|
| Dec. 12-13, 2023. | None. | 5.25% - 5.50%. |
| Oct. 31-Nov. 1, 2023. | None. | 5.25% - 5.50%. |
| Sept. 19-20, 2023. | None. | 5.25% - 5.50%. |
| July 25-26, 2023. | Increase of 25 basis points (or 0.25 percentage point). | 5.25% - 5.50%. |
| June 13-14, 2023. | None. | 5.00% - 5.25%. |
| May 2-3, 2023. | Increase of 25 basis points (or 0.25 percentage point). | 5.00% - 5.25%. |
| March 21-22, 2023. | Increase of 25 basis points (or 0.25 percentage point). | 4.75% - 5.00%. |
| Jan. 31-Feb 1, 2023. | Increase of 25 basis points (or 0.25 percentage point). | 4.50% - 4.75%. |
+ Click to see 2022 Fed rate increases
| FOMC meeting dates | Rate change | Fed rate (as a target range) |
|---|---|---|
| Dec. 13-14, 2022. | Increase of 50 basis points (or 0.50 percentage point). | 4.25% - 4.50%. |
| Nov. 1-2, 2022. | Increase of 75 basis points (or 0.75 percentage point). | 3.75% - 4.00%. |
| Sept. 20-21, 2022. | Increase of 75 basis points (or 0.75 percentage point). | 3.00% - 3.25%. |
| July 26-27, 2022. | Increase of 75 basis points (or 0.75 percentage point). | 2.25% - 2.50%. |
| June 14-15, 2022. | Increase of 75 basis points (or 0.75 percentage point). | 1.50% - 1.75%. |
| May 3-4, 2022. | Increase of 50 basis points (or 0.50 percentage point). | 0.75% - 1%. |
| March 15-16, 2022. | Increase of 25 basis points (or 0.25 percentage point). | 0.25% - 0.50%. |
After sitting at 0% for two years during the coronavirus pandemic, the rate steadily climbed starting in March 2022, as the Federal Reserve aimed to combat inflation. But the climb stopped a year and a half later. The Fed then paused rates eight times between July 2023 and July 2024. In 2024, the Federal Reserve decreased the federal funds rate three times. The Fed held steady in 2025 until its meeting in September, when it cut the rate by 25 basis points. It lowered the rate again in October and December. In the first four FOMC meetings of 2026, the Fed decided to hold the rate steady.
» MORE: Understand how raising interest rates helps inflation
Will rates be cut in 2026?
At the FOMC’s December 2025 meeting, a survey of FOMC members known as the "dot plot" showed that the median prediction is for an additional 25 basis points cut by the end of 2026. The anonymous predictions weren’t unanimous, though.
That cut did not come during the first four meetings this year, held in January, March, April and June. July 28-29 is the next scheduled time that the FOMC could modify the federal funds rate. As of June 17, the futures market CME Group’s FedWatch tool forecasts that a rate hike before the end of 2026 is more likely than a cut.
What happens when the Fed lowers interest rates?
When the Federal reserve lowers the federal funds rate, banks pay less to borrow money from one another. Banks, in turn, lower interest rates on loans (including mortgages) and credit cards, lowering the cost of borrowing money to buy cars, homes and other big purchases. The stock market is likely to be affected by a lower Fed rate hike, with stock prices growing. All of these factors are intended to induce economic growth. With borrowing costs lowered, consumers have incentive to spend and invest more.
Unfortunately, lower interest rates at banks due to a lower Fed rate means that deposit account interest rates will fall, too. So annual percentage yields on deposit products such as CDs, savings and interest-bearing checking accounts will decline as well.
The Federal Reserve paused on changes to the federal funds rate starting in July 2023, keeping rates steady for more than a year. As such, bank interest rates generally remained flat starting in September 2023 until 2024 when interest rates began to fall. In anticipation of a drop, banks started lowering rates on deposit accounts such as savings and certificates of deposit. The Federal Reserve dropped its interest rate three times in 2024: by 50 basis points in September to 4.75% to 5.00%, then by 25 basis points in November to 4.50% to 4.75% and by 25 basis points again in December to 4.25% to 4.50%. After holding rates steady for most of 2025, the Fed cut them by 25 basis points three times before the end of the year: to 4.00% to 4.25% in September, to 3.75% to 4.00% in October, then to 3.50% to 3.75% in December.
» Are rates going up or down? Check out NerdWallet’s savings forecast
What happens when the Fed raises interest rates?
First, some context on Fed rate hikes. The Federal Reserve raises the federal funds rate to curb inflation. When it increases the Fed rate, banks pay more to borrow money from one another. When the federal funds rate rises, it doesn’t just affect banks sending and receiving money. Those banks pass on that expense to customers by charging higher interest rates on products like credit cards and mortgages. The idea is that by increasing the cost of credit, demand for goods and services will fall, causing their prices to subsequently fall, too.
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Here’s why that happens: The Federal Reserve can change only the federal funds rate. But since that rate is tied to other rates and variables, those changes have wide-reaching effects. When the Fed rate goes up, it’s more expensive for banks to borrow money. So it gets more expensive for consumers to borrow money, too. Anything tied to financing, including credit cards, car payments, student loans or mortgages, can get pricier.
On the other hand, a rising rate can lead to higher yields for savers and better rates for CD investors in some bank accounts.
» MORE: See our CD rates forecast
News moves fast. Stay ahead of how it could impact your money.
How does the Fed lower interest rates?
The Federal Open Market Committee, a 12-member group of banking leaders from around the country, sets the federal funds rate and much of the Federal Reserve’s monetary policy. It typically meets eight times a year and sometimes makes rate changes — including increases or decreases — outside its scheduled meetings.
Here's the 2026 FOMC meeting schedule:
- Jan. 27-28.
- March 17-18.
- April 28-29.
- June 16-17.
- July 28-29.
- Sept. 15-16.
- Oct. 27-28.
- Dec. 8-9.
Does the president control interest rates?
President Donald Trump has pledged to lower interest rates, but that decision is out of his direct control.
The FOMC is the only authority on federal funds rate actions. It is a nonpolitical entity and operates independent of the president. Trump has pressured the FOMC to lower rates and has even threatened to fire Powell from his position if he does not bend to Trump’s will. However, a president has no legal authority to remove the chair before the end of term.
Still, presidents can exert indirect influence over how rate decisions are made. Here’s how:
- Appointing officials. The president is in charge of appointing Federal Reserve Board officials, including the chair of the Fed. Trump nominated Powell to serve as chair in November 2017.
- Taking executive actions. The president can take actions to impact the economy including inflation and growth.
- Directing policy decisions. The president can influence Congress to create fiscal policy like spending and tax legislation, which would have economic effects including.
What is the Federal Reserve Board?
The Federal Reserve Board is the umbrella agency that governs the Federal Reserve System. It comprises three groups: the 12 Federal Reserve Banks in the U.S., the Board of Governors and the Federal Open Market Committee.
The Federal Reserve Board is responsible for the Federal Reserve achieving its three Congressional mandates: maintaining maximum employment, steady prices on goods and services, and moderate interest rates throughout the country.
More fed rate coverage
(Photo by Anna Moneymaker/Getty Images)
