What This Chart Shows
- The Fed Funds Rate rises during inflationary periods to cool the economy
- Major spikes occurred in the early 1980s to combat runaway inflation
- Near-zero rates followed the 2008 financial crisis and the 2020 pandemic
- Recent hikes in 2022–2023 aimed to control post-pandemic inflation
Key Takeaways
- The Fed Funds Rate is the primary tool of U.S. monetary policy
- Higher rates slow borrowing and spending, helping reduce inflation
- Lower rates stimulate economic growth during recessions
- Investors closely watch rate changes for market signals
Data Source
Board of Governors of the Federal Reserve System via FRED®