Federal Funds Rate
Track the Federal Reserve's benchmark interest rate. Rate cuts after sustained hiking cycles often signal late-cycle recession risk.
Current Value
Trigger Level: Rate cuts after hiking cycle = late cycle
AI Analysis
As of February 22, 2026, the Fed Funds Rate stands at 3.64%, indicating an accommodative monetary policy. This suggests that the Federal Reserve is cutting rates after a previous hiking cycle, which typically occurs in the late stages of an economic cycle. While the current rate is safe, the trend points to increased recession risk as the economy may be slowing down.
What is the Fed Funds Rate?
The Federal Funds Rate is the interest rate at which banks lend to each other overnight. Set by the Federal Reserve, it is the primary tool for monetary policy and influences all other interest rates in the economy.
Why It Matters for Recession Risk
When the Fed raises rates aggressively to fight inflation, it creates a restrictive environment that slows economic activity. Rate cuts after a hiking cycle often confirm that the Fed sees recession risk.
Historical Context
The Fed raised rates from 0% to 5.25–5.50% in 2022–2023, the fastest hiking cycle in 40 years. Historically, recessions have followed the end of tightening cycles as the lagged effects of high rates ripple through the economy.
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