Effective fed funds rate: 3.64% February 19th vs 3.64% February 18th

Effective fed funds rate: 3.64% February 19th vs 3.64% February 18th

Federal Funds Rate Remains Steady Amid Mixed Economic Signals

The effective federal funds rate remained unchanged at 3.64% on February 19, 2026, consistent with the prior day's rate of 3.64%. This stability aligns with the Federal Open Market Committee's (FOMC) recent decision to maintain the target range for the federal funds rate at 3.5% to 3.75% during its January 28 meeting. The FOMC cited a "solid" expansion of economic activity, though job gains have remained modest and inflation remains "somewhat elevated" according to the FOMC statement.

The federal funds rate—the interest rate at which banks lend reserves to one another overnight—is a key tool for monetary policy. While market forces determine the effective rate, the Federal Reserve influences it through the Interest on Reserve Balances (IORB) rate. By adjusting the IORB, the Fed steers the effective rate toward its target range. Currently, the effective rate of 3.64% falls within the 3.5%–3.75% target range, reflecting the Fed's balancing act between supporting employment and curbing inflation.

The FOMC's decision to hold rates steady followed three consecutive rate cuts in late 2025, aimed at addressing weak labor market data and persistent inflation above its 2% target. However, recent economic indicators, including a 4.4% unemployment rate and mixed inflation readings (core PCE at 3.0%), have prompted a cautious approach. Two officials, Stephen Miran and Christopher Waller, dissented, advocating for a 25-basis-point rate cut.

The Fed emphasized its commitment to a "meeting-by-meeting" approach, prioritizing incoming data and evolving risks. The effective federal funds rate indirectly influences broader financial conditions, including prime rates, mortgages, and consumer loans. As the Fed navigates its dual mandate of maximum employment and price stability, market participants will closely monitor upcoming economic reports for clues about future policy adjustments.

(https://fred.stlouisfed.org/series/FEDFUNDS): Federal Reserve Bank of St. Louis (FRED)
(https://www.federalreserve.gov/newsevents/pressreleases/monetary20260128a.htm): Federal Reserve FOMC Statement (January 28, 2026)
(https://finance.yahoo.com/news/federal-reserve-leaves-interest-rates-unchanged-after-3-straight-cuts-as-2-officials-vote-against-decision-140019976.html): Yahoo Finance (Federal Reserve Rate Decision Analysis)
(https://www.federalreserve.gov/releases/h15/): Federal Reserve H.15 Report (February 19, 2026)