United States: Federal Funds Rate - Upper Limit

Macro

2026-06-18

Description

The Federal Funds Rate (FFR) in the United States is defined by a range with an upper and lower limit. The upper limit is typically represented by the Interest Rate on Reserve Balances (IORB), which is the rate paid by the Federal Reserve to commercial banks on their reserve balances held at the Fed.

Prior to 2020, the Federal Reserve differentiated between the Interest on Required Reserves (IORR) and the Interest on Excess Reserves (IOER). However, due to the impact of the COVID-19 pandemic in 2020, the Fed eliminated the reserve requirement. Since both the IOER and IORR rates were set at 0%, the Fed consolidated these two rates into a single rate, the IORB, in 2021.

Published by
Federal Reserve System (Choice)
Frequency
Monthly
Next Update
Hashtags
Finance United States

AI Data Insight

The upper limit of the US federal funds rate in Q2 2026 remained flat at 3.75%, unchanged from the previous value, marking the fourth consecutive meeting of holding rates steady and meeting market consensus. In the first policy decision under new Chair Kevin Warsh, the Fed significantly revised its core inflation forecast upward and removed forward guidance on rate cuts. The latest dot plot further shows that nearly half of the officials expect to resume rate hikes before the end of the year, highlighting that fighting inflation remains the absolute top priority at present.

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AI Data Insight

The upper limit of the US federal funds rate in Q2 2026 remained flat at 3.75%, unchanged from the previous value, marking the fourth consecutive meeting of holding rates steady and meeting market consensus. In the first policy decision under new Chair Kevin Warsh, the Fed significantly revised its core inflation forecast upward and removed forward guidance on rate cuts. The latest dot plot further shows that nearly half of the officials expect to resume rate hikes before the end of the year, highlighting that fighting inflation remains the absolute top priority at present.

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Macro
Description

The Federal Funds Rate (FFR) in the United States is defined by a range with an upper and lower limit. The upper limit is typically represented by the Interest Rate on Reserve Balances (IORB), which is the rate paid by the Federal Reserve to commercial banks on their reserve balances held at the Fed.

Prior to 2020, the Federal Reserve differentiated between the Interest on Required Reserves (IORR) and the Interest on Excess Reserves (IOER). However, due to the impact of the COVID-19 pandemic in 2020, the Fed eliminated the reserve requirement. Since both the IOER and IORR rates were set at 0%, the Fed consolidated these two rates into a single rate, the IORB, in 2021.

Published by
Federal Reserve System (Choice)
Frequency
Monthly
Next Update
Hashtags
Finance United States