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Federal
Funds (target) Rate: 1990 to Present
Click the graph to download PDF version.
Significance: The nation's central bank through its Federal Open Market Committee (FOMC) moved on June 27 to lower the target federal funds rate by 25 basis points to 3.75 percent. This is the lowest that the overnight lending rate among banks has been since April 1994, when this highly visible rate was on the way up. Current convention is to tack on 300 basis points to the target federal funds rate to generate the commercial bank prime lending rate. Thus, today the prime lending rate in the U.S. stands at 6.75 percent.