The Fed Held Rates at 3.75-4.00%, Unchanged Since September 2026. Here's Where That Sits in 72 Years
The Federal Reserve left its benchmark interest rate unchanged on Wednesday, at a target range of 3.75% to 4.00%, where it has been since September 17, 2026.
The federal funds rate is what banks charge each other to borrow overnight. Nobody in Iowa pays it directly. But it is the floor under almost every other rate, and some of them are tied to it by contract and move the same day.
What the Fed said
The Committee decided to maintain the target range at 3.75% to 4.00%. The vote was 10-2. On inflation, the statement says:
Inflation remains elevated.
The accumulation of more information will help the Committee determine the policy stance appropriate to ensure a timely return of inflation to the Committee's 2 percent goal.
The Committee will deliver price stability.
Read the full statement on federalreserve.gov
Have we been here before?
Going back to 1954, the effective rate has averaged between 3.75% and 4.00% in twelve separate stretches, the first in 1959. The longest lasted nine months (September 1959 to May 1960). Every visit has been short: rates have passed through this level more than they have stayed.
72 years in one table
| Decade | Average effective fed funds rate |
|---|---|
| 2020s so far | 2.85% |
| 2010s | 0.61% |
| 2000s | 2.96% |
| 1990s | 5.15% |
| 1980s | 9.97% |
| 1970s | 7.10% |
| 1960s | 4.18% |
| 1950s (from July 1954) | 2.36% |
The high was 19.10% in June 1981. That same stretch put the prime rate at 21.50% (December 1980) and the 30-year mortgage at 18.63% (October 1981) -- the borrowing costs that met Iowa farms carrying debt into the 1980s farm crisis. At the other end, the effective rate sat under 0.25% for 109 months between the 2008 financial crisis and 2022, and the 30-year mortgage bottomed at 2.65% in January 2021. It was 7.32% the week of October 22, 2026.
Why they always talk about inflation
The Fed's job is to hold inflation near 2% a year. Consumer prices were up 3.7% from a year earlier in September 2026, against 3.0% a year before that. The number to watch is the rate minus inflation -- what borrowed money really costs, and what savings really earn, once prices have moved:
| Month | Effective fed funds | Inflation (CPI, 12 mo) | Rate minus inflation |
|---|---|---|---|
| Latest: September 2026 | 3.75% | 3.7% | +0.0 points |
| A year earlier: September 2025 | 4.22% | 3.0% | +1.2 points |
| Highest since 1970: June 1981 | 19.10% | 9.7% | +9.4 points |
| Lowest since 1970: March 2022 | 0.20% | 8.6% | -8.4 points |
That gap is thin: the Fed's rate was only just above the pace prices were rising.
Why an Iowan should care
Iowa borrows to grow things. Seed, fertilizer, cash rent, equipment and grain in the bin are commonly financed on operating lines, and a line priced off prime feels a Fed decision the day it takes effect -- faster than almost any other national number. The same town that borrows also saves, and savers sit on the other end of the same teeter-totter.
Sources: Federal Reserve FOMC statement, October 28, 2026; Federal Reserve Bank of St. Louis FRED series DFEDTAR, DFEDTARU, DFEDTARL (target), FEDFUNDS (monthly effective rate, 1954 to September 2026), CPIAUCSL (consumer prices), DPRIME (bank prime loan rate), MORTGAGE30US (Freddie Mac 30-year fixed); USDA AMS Iowa average cash corn bid; USDA NASS Iowa Crop Progress. Rate minus inflation is the monthly effective rate minus the 12-month change in CPI. Loan, savings and crop amounts are illustrative; interest is simple interest on the stated balance.
Compiled automatically by the Drive365 Data Desk from published Federal Reserve and USDA data. Generated 2026-10-28 18:20 UTC. This page reports published figures and the arithmetic on them. It does not forecast interest rates, land values or markets, and is not financial, lending or business advice.
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