For 14 years, the federal funds rate has hovered around zero. The Federal Reserve or “Fed” maintained these low rates to stimulate the economy during two steep market downturns: the 2008 Great Recession and the 2020 COVID-19 pandemic sell-off.
But, the economy has recovered since those events, and prices are rapidly increasing from record-high inflation and other factors. The Fed has drastically increased rates since January 2022 to slow down inflation and lessen the impact that a recession would have.
