Skip to content

Annual US Interest Rate 1995 to 2025

Run the Interest Rate MicroSim Edit this MicroSim

Sample iframe

1
<iframe src="https://dmccreary.github.io/personal-finance/sims/interest-rate/main.html" height="550px" scrolling="no"></iframe>

Features of the Chart

  • Line and Bar Combination: The chart displays both bars for each year's rate and a connected line to better visualize the trend over time.
  • Interactive Elements:
    • Year range sliders that allow you to focus on specific time periods
    • Hover functionality that shows detailed information about each year's rate and economic context
  • Average Rate Line: A dashed red line showing the 30-year average rate for reference
  • Responsive Design: The chart will resize to fit the container it's placed in

Historical Context

The chart clearly shows several important periods in US monetary policy over the last three decades including the "insurance cuts" in the mid-1990s under Greenspan, the dot-com bubble and bust, the near-zero rates following the 2008 financial crisis, and the dramatic rate hikes beginning in 2022 to combat high inflation Bankrate.

Some key patterns visible in the data:

  1. The significant drop after the 2001 recession and dot-com crash
  2. The extended period of near-zero rates from 2009-2015 following the financial crisis
  3. The dramatic reduction in early 2020 in response to the COVID-19 pandemic, followed by the aggressive series of rate hikes beginning in 2022 that brought rates to their highest level since 2007 StatistaStatista
  4. The beginning of rate cuts in late 2024 that brought the rate down to 4.48% by December Statista

The chart provides insight into how the Federal Reserve uses interest rates as a tool for monetary policy, adjusting them in response to economic conditions like inflation, unemployment, and financial market stability.

Lesson Plan

Learning Objectives

After completing this activity, students will be able to:

  1. Explain how the Federal Reserve sets interest rates
  2. Analyze the relationship between interest rates and economic conditions
  3. Identify how interest rate changes affect borrowing and saving
  4. Evaluate historical patterns in monetary policy

Target Audience

High school students learning about economics and personal finance.

Prerequisites

  • Basic understanding of borrowing and lending
  • Familiarity with economic concepts like recession

Activities

  1. Exploration: Identify the periods of lowest and highest interest rates
  2. Research: Find how mortgage rates changed during the 2008 financial crisis
  3. Analysis: Compare interest rate patterns during recessions vs expansions

Assessment

  • Explain why the Fed lowered rates to near zero in 2008-2009
  • Describe how higher interest rates affect home buyers
  • Identify three economic indicators the Fed considers when setting rates

References

  1. Federal Reserve - Monetary Policy - Official Fed information
  2. Bankrate - History of Federal Funds Rate - Historical data
  3. Investopedia - Federal Funds Rate - Educational resource