This Labor Day weekend we launched a significant update to ustreasuryyieldcurve.com, adding the Federal Funds Target Rate to the US yield curve chart. The FOMC expresses its target of the short term overnight lending rate for banks as a range, currently at 5.25-5.5%. This is the interest rate widely cited in the media whenever the Fed raises or lowers interest rates.
The data is available back to 1982. Prior to October 1982, the Fed targeted M2 money supply growth instead of setting a specific interest rate. The M2 control policy was specifically designed to combat high inflation during the early 1980s recession, and ran from October 1979 to October 1982 under the leadership of Paul Volker. Prior to that, the Fed did control interest rates through open market operations, but did not publicize its interest rate targets as it does today.
Resources:
When Did the FOMC Begin Targeting the Federal Funds Rate? What the Verbatim Transcripts Tell Us
How did the Fed change its approach to monetary policy in the late 1970s and early 1980s?
Federal Reserve History: Recession of 1981-92
Why the Fed targets rates vs money supply
Change to yield curve pin functionality
This update also introduces a change to the navigation on the yield curve page. When clicking the "Pin current dataset" button, the cursor changes so that the newly added dataset becomes the active yield curve when you change the date. This makes it easier to order the dates chronologically.