United States: Federal Funds Rate - Upper Limit

Macro

2026-09-17

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

In Q3 2026, the latest federal funds rate upper bound rose to 4.0%, up from 3.75% in the previous quarter, marking the Fed's first rate hike in three years. Facing stubborn inflation and energy pressures driven by geopolitics, this decision fully aligned with market expectations. Furthermore, the policymakers' dot plot suggests room for further tightening before the end of the year.

AI Data Insight

In Q3 2026, the latest federal funds rate upper bound rose to 4.0%, up from 3.75% in the previous quarter, marking the Fed's first rate hike in three years. Facing stubborn inflation and energy pressures driven by geopolitics, this decision fully aligned with market expectations. Furthermore, the policymakers' dot plot suggests room for further tightening before the end of the year.

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