Stimulus.org - Change in Interest Rate

Interest Rate Cuts: 4.25% to 3.5%

Maya MacGuineas — Fri, 10 Jul 2009 19:17:47 +0000

Date:

January 22, 2008

Policy Area:

Monetary Policy

Economic Target:

Financial Institutions

Action Type:

Change in Interest Rate

75 basis point reduction in federal funds rate

Source:

FOMC Jan. 22 Announcement

Notes:

Activities of the Federal Reserve are not directly recorded in the federal budget. However, each year the Federal Reserve remits a portion of its earnings to the general treasury. This remittance is generally in the range of $20-$30 billion per year, but the CBO estimates that the Fed's earnings will be lower by approximately $90 billion over the next ten years.

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Interest Rate Cut: 3.5% to 3%

Maya MacGuineas — Fri, 10 Jul 2009 19:14:57 +0000

Date:

January 30, 2008

Policy Area:

Monetary Policy

Economic Target:

Financial Institutions

Action Type:

Change in Interest Rate

50 basis point reduction in federal funds rate.

Source:

FOMC Jan. 30 Release

Notes:

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Interest Rate Cut: 3% to 2.25%

Maya MacGuineas — Fri, 10 Jul 2009 19:13:52 +0000

Date:

March 18, 2008

Policy Area:

Monetary Policy

Economic Target:

Financial Institutions

Action Type:

Change in Interest Rate

75 basis point reduction in federal funds rate.

Source:

FOMC March 18 Release

Notes:

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Interest Rate Cut: 2.25% to 2%

Maya MacGuineas — Fri, 10 Jul 2009 19:12:45 +0000

Date:

April 30, 2008

Policy Area:

Monetary Policy

Economic Target:

Financial Institutions

Action Type:

Change in Interest Rate

25 basis point reduction in federal funds rate.

Source:

FOMC April 30 Release

Notes:

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Interest Rate Cut: 2% to 1.5%

Maya MacGuineas — Fri, 10 Jul 2009 19:11:43 +0000

Date:

October 8, 2008

Policy Area:

Monetary Policy

Economic Target:

Financial Institutions

Action Type:

Change in Interest Rate

50 basis point reduction in federal funds rate coordinated with other central banks, including the Bank of Canada, the Bank of England, the European Central Bank, Sveriges Riksbank and the Swiss National Bank.

Source:

FOMC Oct. 8 Release

Notes:

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Interest Rate Cut: 1.5% to 1%

Maya MacGuineas — Fri, 10 Jul 2009 19:10:20 +0000

Date:

October 29, 2008

Policy Area:

Monetary Policy

Economic Target:

Financial Institutions

Action Type:

Change in Interest Rate

50 basis point reduction in federal funds rate.

Source:

FOMC Oct. 29 Release

Notes:

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Interest Rate Changes

suggp — Thu, 09 Jul 2009 19:26:02 +0000

Federal Funds Rate

Who:

Fed

Policy Area:

Monetary Policy

Economic Target:

Financial Institutions

Economic Target:

Financial Institutions

Action Type:

Change in Interest Rate

The federal funds rate is the interest rate at which one bank lends money, available at the Federal Reserve, to another financial institution. It is determined by the Federal Open Market Committee (FOMC), which meets eight times per year in order to set monetary policy, review current economic conditions, determe risks to economic growth and fiscal sustainability, and adjust the federal funds rate. The FOMC comprises the seven member Fed Reserve Board of Governors, the president of the Federal Reserve Bank of New York, as well as four rotating members from the various regional Federal Reserve banks. Beginning in June of 2006, the FOMC began to lower interest rates from what was almost a five year high, at 5.25%. Since the financial crisis began however, the FOMC has continued to lower rates, finally reaching a floor of a floating rate between 0% and 0.25%.

Notes:

Since 12/16/2008 the federal funds rate has been a range between 0% and .25%. Since that date, the above graph displays the federal funds rate as the average of the range, or .125%. Federal funds rate historical tables can be found here.

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