Key U.S. Interest Rates

Every line here is an annual interest rate, measured in percent, so they all share one vertical scale. That makes them easy to compare at a glance — but it can also be misleading if you forget that each line represents a different market and a different maturity.

The federal funds rate is an overnight rate inside the banking system. The 2-, 10-, and 30-Year Treasury yields are what the U.S. government pays to borrow for those lengths of time. The bank prime rate is a base rate that major banks post. The auto-loan line is an average finance rate on five-year new-car loans at commercial banks. They are drawn together because they are related, not because they are the same thing.

When several lines rise and fall together, it is tempting to conclude that one sets the others. It usually does not work that mechanically. Short-term rates respond quickly to Federal Reserve policy; longer-term yields respond mostly to what markets expect over years; and consumer loan rates layer additional costs and risks on top of a benchmark. Lines can move together for shared reasons without one line being a formula for another.

Use the Range buttons or drag the zoom bar under the chart to focus on a period. The Series toggles, grouped by role, let you show or hide any line. Switch View to Extra over benchmark to look at the gap between a consumer rate and a government benchmark instead of the rates themselves.

The federal funds rate is the interest rate banks charge each other to borrow reserves overnight. The line on this chart is the effective federal funds rate — the average rate actually transacted across the banking system.

It is the rate most strongly influenced by Federal Reserve monetary policy. The Fed sets a target range and uses its tools to keep the effective rate inside it. Because so much short-term borrowing and saving is priced off overnight conditions, changes here tend to reach short-term rates — and the interest you earn on savings — relatively quickly.

What the Fed does not do is directly set the rate on an ordinary mortgage or car loan. Those are offered by lenders in competitive markets and depend on longer-term yields, costs, and risks. It is more accurate to say the Fed strongly influences the short end of the rate world than to say it "sets all interest rates."

Treasury securities are debts of the U.S. government: you lend the government money, and it pays you interest and returns the principal at maturity. The yield is the annual return, and it varies by maturity — how long until the loan is repaid. That is why this page shows 2-, 10-, and 30-Year yields separately.

Treasury yields are widely used as benchmark rates: a starting point that other borrowing is priced against. In finance they are often called the "risk-free rate," but that phrase is a convention, not a literal promise. What it mainly means is very low assumed credit-default risk — the market treats full and timely repayment by the U.S. government as close to certain.

"Risk-free" does not mean "no risk of any kind." Treasuries still carry inflation risk (rising prices can erode what your interest is worth) and market-price risk (if rates rise, the market value of a bond you already hold falls). A longer maturity is not automatically "safer" for an investor who might need to sell before maturity — its price can swing more when yields move.

Lending money for two years and lending it for thirty are not the same commitment, so they command different yields. The pattern of yields across maturities is called the yield curve.

When investors decide what yield to accept for a given maturity, they weigh several things: expected future short-term rates (where they think overnight rates are headed), expected inflation over the life of the bond, the outlook for economic growth, the demand for safe and liquid assets, and a term premium — extra compensation for the uncertainty of locking money up for longer.

Usually longer maturities yield more than shorter ones, but not always. Sometimes short-term yields rise above long-term yields — an "inverted" curve — when markets expect rates to fall later. So it is not a rule that one maturity is always above another; the ordering itself carries information, and it changes over time. Toggle the three Treasury lines on together and watch how the gaps between them widen, narrow, and occasionally flip.

The bank prime rate is a base rate that major banks post. It is commonly associated with shorter-term and variable-rate lending — many credit cards, home-equity lines, and some business and personal loans are priced as "prime plus a margin."

Prime tends to move closely with short-term policy conditions; in practice it has usually tracked the federal funds rate with a fairly steady step above it. That is why, on the chart, the prime line and the federal funds line often look like parallel companions.

Two cautions. First, prime is not the rate every borrower receives — it is a reference point, and most consumer offers add a margin on top of it or use another pricing method entirely based on credit profile and product. Second, prime being "posted by banks" does not make it a guaranteed or universal quote; treat it as a benchmark, not a personal rate.

This chart does not include a mortgage-rate line, but mortgages are worth understanding because they show how a consumer rate relates to a benchmark.

The Federal Reserve does not directly set fixed mortgage rates. Long-term fixed mortgage rates are influenced by longer-term market yields, and the 10-Year Treasury is the yield most commonly used as a comparison benchmark — even though a 30-year mortgage is not a 10-year loan, because homeowners tend to move or refinance well before 30 years, so its effective life is closer to the 10-year part of the curve.

A mortgage rate is not the 10-Year yield plus a fixed number. On top of the benchmark, mortgages add prepayment risk (borrowers can refinance when rates fall), credit risk, servicing costs, guarantee or insurance costs where applicable, prevailing market conditions, lender expenses, and profit. The size of that gap changes over time — there is no permanent, fixed mortgage-to-Treasury spread.

To make that relationship visible, the chart includes a dashed illustrative mortgage line — the 10-Year Treasury plus a fixed 1.8 percentage-point spread. It is drawn only to show the shape of the benchmark connection. Because it is computed from the public-domain Treasury yield, it introduces no third-party mortgage data; but for the same reason it is not real mortgage data. The true gap over the 10-Year is never constant (it has run anywhere from roughly 1.3 to over 3 percentage points), so a real mortgage rate is not the 10-Year plus a fixed number.

The dashed line is an illustration only — not a measured series and not a quoted rate. For an actual figure, check a current mortgage rate at its source, or plug a rate you have been quoted into our tools: Will Refinancing Save You Money? and Should You Buy Mortgage Points?

The auto-loan line sits well above the Treasury lines, and the reasons are instructive. A lender making a five-year car loan faces risks and costs that lending to the U.S. government does not involve.

The borrower may default. The vehicle depreciates — it is usually worth less than the loan balance for part of the term — so if the lender has to repossess and resell, it may not recover the full amount owed. Loan terms and borrower credit profiles differ widely, so an average hides a wide range. And lenders carry real acquisition, servicing, compliance, funding, and capital costs, plus profit.

One important caveat about the line itself: it is an aggregate series of finance rates on 60-month new-auto loans at commercial banks, not a personalized quote and not the universal average for every new-car borrower. Advertised dealer or manufacturer offers — including promotional 0% deals for the most qualified buyers — may not represent the rate available to most borrowers, and financing arranged through dealers is not the same population as direct commercial-bank loans. Read the label on the chart as "a representative commercial-bank rate," not "the rate you will get."

For more, see The Long and Short of Car Loans, and model a specific loan with the Car Deal Analyzer.

A useful way to think about the whole picture is a simple, conceptual relationship — not an exact pricing formula:

Consumer borrowing rate = benchmark cost of money + additional costs and risks

The benchmark cost of money is roughly what a very low-credit-risk borrower like the U.S. government pays for a similar term — a Treasury yield. The amount a consumer rate sits above that benchmark is often called a spread. It is tempting to read the whole spread as "the risk that this borrower won't pay," but that is not right.

The extra above a Treasury rate may reflect borrower credit risk, collateral risk, term and interest-rate risk, prepayment risk, liquidity, operating and servicing expenses, regulatory capital requirements, particular loan features, lender profit, and sometimes temporary market stress. Default risk is only one ingredient. That is exactly what the Extra over benchmark view is meant to teach: the gap is real and meaningful, but it should not be read as a pure measure of how risky a borrower is.

Change the date range and the visible series, and a handful of patterns become easy to see for yourself.

Short-term rates can react quickly to Federal Reserve policy

The federal funds line often moves in fast, stair-step jumps — the footprint of policy decisions. The prime rate usually steps right along with it.

Long-term yields move to their own beat

The 10- and 30-Year Treasury lines can move before, after, or differently from the federal funds rate, because they reflect years of expected conditions rather than today's overnight setting.

Consumer rates stay above the benchmarks

The auto-loan line generally remains above the Treasury lines. The distance is the spread — and it is not constant. Try the Extra over benchmark view and watch it widen and narrow.

Recessions matter, but the pattern varies

Rates often fall around recessions (the gray bands), but the timing and size differ each time. A lower benchmark also does not guarantee that every consumer is quoted a lower rate — lenders adjust the other ingredients too.

Every series below is produced by the Board of Governors of the Federal Reserve System and distributed through FRED (Federal Reserve Bank of St. Louis). These are U.S.-government works in the public domain, suitable for reuse with attribution on a public educational site. This page intentionally uses government-produced series and does not use proprietary datasets that FRED also redistributes under license.

Missing values. When a series has no observation for a month, it is stored as null and drawn as a gap — never interpolated or filled with a placeholder. The 60-month new-auto series in particular is not reported every month, so its line has visible breaks.

A few things to keep in mind. FRED distributes data from many different providers, and being available through FRED does not by itself make a dataset public domain — which is why the series here were chosen deliberately. The underlying data may be revised after first release. The latest observation for each series can fall on a different month, so the summary values above are labeled individually rather than as a single snapshot. Monthly averages smooth over daily movements and should not be read as end-of-month quotes.

This page is a teaching tool, not financial advice or a source of personalized loan quotes.

Each series links to its official FRED page. FRED is the distributor; the originating agency for all six is the Board of Governors of the Federal Reserve System.

Suggested citations for each series are recorded in the page's data file and in the repository's data-source documentation. All trademarks belong to their respective owners.