United States: Federal Funds Rate - Upper Limit

Macro

2026-10-29

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

AI Data Insight

The upper bound of the US Federal Funds Rate in the fourth quarter of 2026 was maintained at 4.0%, unchanged from the previous value and in line with market expectations. After resuming interest rate hikes in September, the Federal Reserve voted 10-to-2 to hold rates steady at this meeting, highlighting policy divergence amid rebounding inflation and a strong economy. Going forward, the Fed will be highly data-dependent in deciding whether to tighten further in December.

AI Data Insight

The upper bound of the US Federal Funds Rate in the fourth quarter of 2026 was maintained at 4.0%, unchanged from the previous value and in line with market expectations. After resuming interest rate hikes in September, the Federal Reserve voted 10-to-2 to hold rates steady at this meeting, highlighting policy divergence amid rebounding inflation and a strong economy. Going forward, the Fed will be highly data-dependent in deciding whether to tighten further in December.

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