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Mark Twain wrote that history doesn’t repeat itself, but it often rhymes. This
could also be said of Federal Reserve interest rate policy, although it’s a lot
less entertaining than “The Million Pound Bank Note.”

For anyone who follows financial markets, it’s essential to have a good grasp
on the course of the Fed’s monetary policy decisions and the reasoning behind
them. Understanding why the Federal Open Market Committee (FOMC)
raised the fed funds target rate in 1994 can provide insight into why it’s doing
something similar today.

Forbes Advisor has compiled this history as a handy guide to the course of
the federal funds rate and the Federal Reserve’s monetary policy decisions
over the last 30 years.
Understanding Fed Interest Rate Decisions

The Federal Reserve adjusts the federal funds target rate range in response to

what’s happening in the economy. Adjusting rates helps the Fed achieve
conditions that satisfy their dual mandate: Keep prices stable and maximize
employment.
Here’s how that works: The Fed raises interest rates when the economy starts
overheating—too much inflation—and cuts rates when the economy looks
weak—high unemployment.

Plenty of other data factor into Fed monetary policy decisions, including gross

domestic product (GDP), consumer spending and industrial production, not to
mention major events like a financial crisis, a global pandemic or a massive
terrorist attack.
To that end, we’ve structured this compendium of fed funds historical data
with narratives about the different factors that informed the Fed’s decisions.
The central bank may be staffed by officious economists, analysts and business
experts, but it’s also highly responsive to the changing political winds.

About the Data

The tables below list the dates of Fed meetings when the FOMC changed
interest rates, the size of each rate change in basis points (bps) and the
resulting federal funds target rate range.

Basis points are a common unit of measurement for interest rates. One basis
point is equal to 1/100th of one percentage point, or 0.01%. For instance, a half
a percentage point change in an interest rate would equals 50 basis points.
Please note that before 1990, the Fed didn’t explicitly target a set federal funds
rate. If you’re interested in earlier rate policy, look through this Federal
Reserve document produced through a Freedom of Information Act request.