---
title: Fed Funds Rate
description: Fed funds rate explained: how the FOMC's target range anchors every US rate, how futures price cuts, and a worked example of CPI repricing the path.
source: Helious
canonical: https://helious.io/learn/fed-funds-rate
---

# Fed Funds Rate

The **federal funds rate** is the interest rate banks charge each other for overnight, unsecured loans of reserves, and, by extension, the Federal Reserve’s primary policy lever. The FOMC sets a target *range* (for example 4.25–4.50%) at its eight yearly meetings, and steers the effective rate inside it using interest on reserves and the reverse repo facility.

Every other US interest rate keys off this anchor. The 2-year Treasury is essentially a forecast of its average path; SOFR trades within a few basis points of it; mortgages, credit cards, and corporate loans reprice off expectations about where it is heading. That is why markets obsess over “cuts priced in”: fed funds futures translate directly into meeting-by-meeting odds.

- Standard moves are 25bp increments; 50bp signals urgency in either direction.
- The **effective** fed funds rate (EFFR) is the volume-weighted daily print, normally glued to a single level inside the range.

**Worked example:** The target range is 4.25–4.50% and the December fed funds futures contract implies an average rate of 3.97%. That gap of roughly 40bp below the current midpoint means the market prices about one and a half 25bp cuts by December. A hot CPI print the next morning lifts the implied rate to 4.12%, nearly a full cut priced out in one release.

## Questions

### What is the fed funds rate?

The overnight rate at which banks lend reserves to each other, and the rate the Federal Open Market Committee sets a target range for. It is the anchor for every other US rate, which is why the whole front end of the curve trades on what the Fed is expected to do next.

### When is the next Fed meeting?

Helious publishes the FOMC schedule with every meeting date, the statement and press conference times, and who votes this year, on [the FOMC page](https://helious.io/fomc) and [the Fed speakers page](https://helious.io/fed).

## Live data

Helious measures this and publishes the current figures at [https://helious.io/learn/fed-funds-rate](https://helious.io/learn/fed-funds-rate), and through the get_auctions and get_rates_and_curve tools on its MCP server at https://helious.io/mcp.