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Fed Funds Rate - Hysterical (or Historical)

January 25, 2008 on 9:07 am | In Economy |

Trying to track down the data for historical Fed Funds rates has been fun. Here are a couple of links for you: Fed Reserve back to 1954and Fed Reserve back to 1990.

As you may have read, Tuesday’s drop was the biggest since October 1984. At that time it was dropped about 1.25%, from 11.30% to 9.99%. There was also another drop of about 1.00% in December. Rates went from 9.43% to 8.38%.

Reading deeper than the numbers, the actual effect of the drop is interesting. The October drop was about 11.6%. The December was about 11.1%. The first January 2008 drop (there may be a second one, they are saying) was a 17.6% drop. So our 2008 cut was much larger as a percentage. However that still isn’t the largest % drop. June 2003 was pretty high when it went from 1.25% to 1.00%. That was a 20% drop. The award so far goes to November 2002. It went from 1.75% to 1.25%, a 28.6% drop.

If the Fed does drop rates again next week hysteria, I mean history,may truly be made. If they drop a quarter, that will be a 23.5% drop in a single month. If they drop .50%, that will be 29.4%. And then Janaury 2008 will be the new winner.

I invite you to dig into the above links and let me know what you find.

cd :O)

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[…] Jumbo CD Investments digs a little deeper into historic rate cuts in this post. Quite interesting! […]

Pingback by Last Link Love of My Single Life | Personal Finance Blog by Money Ning — February 3, 2008 #
Hello! I was looking for info on the Fed Rates! Thanks for the link to the rates back to 1954! They were easy to import to Excel for a graph!

Thanks!

Comment by John from Credit Card Debt Reduction Services — June 28, 2008 #
You are most welcome. I’ve also been working on a graph showing the lengths of the peaks and valleys. When finished I’ll post it.

Comment by CD Rates — June 28, 2008 #
Interesting information! I see that it peaked in January of 1981, why did this happen?

Comment by Algarve Portugal — July 10, 2008 #
1981 was near the height of the inflation crisis. I was eleven and honestly don’t remember much. Oil (as it is fast becoming now) was out of control. Here is some info I found,

As the crisis mounted, William E. Simon, deputy secretary of the treasury in the Nixon administration, was appointed ?energy czar.? In that post, wrote Simon years later, ?I myself became an illustration of a free-market principle ? [namely] that government planning and regulation of the economy will ultimately lead to shortages, crises, and, if not reversed in time, some form of economic dictatorship…. Years of incoherent government intervention strangled energy production, domestic supplies diminished, artificial shortages emerged, a foreign embargo on oil precipitated a crisis, there was a violent public outcry for an instant solution, an energy ?dictatorship? was established to allocate the rare commodity ? and I, incredibly, became the ?dictator.?… There is nothing like becoming an economic planner oneself to learn what is desperately, stupidly wrong with such a system.??

The dictatorship Simon was appointed to head had been decades in the making. ?I was shocked to learn the degree to which our energy supplies were stagnating and struggling futilely against regulatory shackles,? he recalled. ?In the oil realm, demand was rising constantly; but domestic exploration and production were declining sharply, and from year to year we were growing more dependent on imports. All the elements of an impending energy catastrophe were visible.”

Here is the link to the article.

Comment by CD Rates — July 11, 2008 #
Thanks for publishing this data, it makes visualizing the inflation and federal rates easier!

Comment by Voos Baratos — August 31, 2008 #
The fed has decided not to cut interest rates today even with the financial turmoil in Wall Street. Lehman Brothers filed for bankruptcy, AIG is in trouble and Merill Lynch just sold herself. Apparently, the Fed is saving ammo for worse times ahead.

Comment by Singapore Property — September 18, 2008 #