Fed interest rate history · 2024
The Fed Funds Rate in 2024
In 2024, the Federal Reserve cut its benchmark rate from 5.5% to 4.5%, for a yearly average of 5.27% — the highest annual average in the modern series. Here's the month-by-month path, what the Fed did and why, how the UK and Europe compared, and where it sits against the 3.75% of today.
- 2024 average 5.27% high 5.5% · low 4.5%
- Net move -1.00 pts 5.5% → 4.5%
- vs today 3.75% in 2026
- 2009–2026 average 1.55% long-run norm
2024 month by month
The rate began 2024 at 5.5% and ended it at 4.5%. Along the way the Fed brought it down in 3 — a net reduction of 1.00 points across the year. Its high was 5.5% and its low 4.5%. The chart above traces that path; hover any month to read the exact level.
What the Fed did in 2024, and why
With inflation cooling, the Fed began cutting rates from their multi-decade high.
The Fed sets this rate to serve its "dual mandate" — stable prices and maximum employment. When inflation runs hot it raises the benchmark to cool borrowing and demand; when the economy weakens it cuts to encourage activity. In 2024 the rate averaged 5.27%, which makes the year the highest annual average in the modern series. For context, the benchmark has averaged 1.55% across the whole 2009–2026 record and ran about 3.05% on average through the 2020s, so 2024 sat above its own decade.
What it meant for your money
The federal funds rate is the wholesale price of money, and it filters into almost every rate a household touches. When it sits high, as in 2024, the interest on credit cards, car loans and other variable-rate debt tends to be expensive, while the yield on savings accounts, CDs and money-market funds is more rewarding. Fixed mortgage rates take their cue more from long-term Treasury yields than from the Fed directly, but they generally drift in the same direction. You can see that year's home-loan cost in our mortgage-rate history for 2024.
The US in global context
The Fed wasn't acting in isolation. Entering 2024, the Bank of England held its headline rate near 5.19% and the European Central Bank near 4%, against the Federal Reserve's 5.5%. The levels differ — and each bank measures its rate slightly differently — but the world's major central banks tend to move through the same broad cycle, tightening and easing together as the same global forces of growth and inflation play out. To see the full three-way comparison over time, view the US/UK/Europe chart on the main study.
How 2024 compares
A year earlier, in 2023, the rate averaged 5.23% and ended at 5.5%. The following year, 2025, it averaged 4.33%. Set against today's 3.75%, 2024's 5.27% average was higher. The Fed sets only the short end of the interest-rate structure; see how the whole Treasury yield curve looked in 2024.
This is one year of the story. For the full picture — every month since 2009, the zero years, the great tightening, and the UK/Europe comparison — see the Federal Reserve interest rate history, 2009–today.
The Fed rate in 2024 — FAQ
What was the federal funds rate in 2024?
In 2024 the Fed's benchmark fell from 5.5% at the start of the year to 4.5% by year-end, averaging 5.27% (a high of 5.5% and a low of 4.5%).
Did the Fed raise or cut rates in 2024?
The rate cut 1.00 points on net, stepping down in 3 months across 2024, from 5.5% to 4.5%. With inflation cooling, the Fed began cutting rates from their multi-decade high.
How does the 2024 rate compare with today?
In 2024 the rate averaged 5.27%, versus 3.75% today. Across the full 2009–2026 record the benchmark has averaged 1.55%, ranging from 0.25% to 5.5%.
What were UK and European interest rates in 2024?
At the start of 2024, the Bank of England sat near 5.19% and the European Central Bank near 4%, against the Federal Reserve's 5.5%. Each central bank defines its headline rate a little differently, but all three tend to move through the same broad cycle.
Why did the Fed move rates in 2024?
With inflation cooling, the Fed began cutting rates from their multi-decade high.
