Federal Funds Rate Changes (Post 1989 to present)
*A basis point is 1/100 percentage point.

Date *Increase *Decrease Rate (%)
2008
October 29 ---50 1.00
October 8 ---50 1.50
April 30 ---25 2.00
March 18 ---75 2.25
January 30 ---50 3.00
January 22 ---75 3.50
2007
December 11 ---25 4.25
October 31 ---25 4.50
September 18 ---50 4.75
2006
June 29 25 --- 5.25
May 10 25 --- 5.00
March 28 25 --- 4.75
January 31 25 --- 4.50
2005
December 13 25 --- 4.25
November 1 25 --- 4.00
September 20 25 --- 3.75
August 9 25 --- 3.50
June 30 25 --- 3.25
May 3 25 --- 3.00
March 22 25 --- 2.75
February 2 25 --- 2.50
2004
December 14 25 --- 2.25
November 10 25 --- 2.00
September 21 25 --- 1.75
August 10 25 --- 1.50
June 30 25 --- 1.25
2003
June 25 --- 25 1.00
2002
November 6 --- 50 1.25
2001
December 11 --- 25 1.75
November 6 --- 50 2.00
October 2 --- 50 2.50
September 17 --- 50 3.00
August 21 --- 25 3.50
June 27 --- 25 3.75
May 15 --- 50 4.00
April 18 --- 50 4.50
March 20 --- 50 5.00
January 31 --- 50 5.50
January 3 --- 50 6.00
2000
May 16 50 --- 6.50
March 21 25 --- 6.00
February 25 25 --- 5.75
1999
November 16 25 --- 5.50
August 24 25 --- 5.25
June 30 25 --- 5.00
1998
November 17 --- 25 4.75
October 15 --- 25 5.00
September 29 --- 25 5.25
1997
March 25 25 --- 5.50
1996
January 31 --- 25 5.25
1995
December 19 --- 25 5.50
July 6 --- 25 5.75
February 1 50 --- 6.00
1994
November 15 75 --- 5.50
August 16 50 --- 4.75
May 17 50 --- 4.25
April 18 25 --- 3.75
March 22 25 --- 3.50
February 4 25 --- 3.25
1992
September 4 --- 25 3.00
July 2 --- 50 3.25
April 9 --- 25 3.75
1991
December 20 --- 50 4.00
December 6 --- 25 4.50
November 6 --- 25 4.75
October 31 --- 25 5.00
September 13 --- 25 5.25
August 6 --- 25 5.50
April 30 --- 25 5.75
March 8 --- 25 6.00
February 1 --- 50 6.25
January 9 --- 25 6.75
1990
December 18 --- 25 7.00
December 7 --- 25 7.25
November 13 --- 25 7.50
October 29 --- 25 7.75
July 13 --- 25 8.00
Rate Changes # 31 46

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Federal Funds Pit
Federal Funds Pit
History of Federal Funds Rate changes
LIBOR - OIS (November 11, 2008)
LIBOR is down to 2.18% a 4-year low. It reached a high of 4.81% on 10/10/08 when equities found new 52 week lows. It was about 2.81% the day Lehman filed for bankruptcy on 9/15/08. LIBOR-OIS spread may be a worry. It has fallen to 168 basis points, which compares to 87 basis points on the last trading day before Lehman declared bankruptcy, but has averaged 11 basis points in the five years before the recent financial crisis. In the last five years before January we had just completed a 4 1/2 year bull market (03-07). Alan Greenspan stated recently that the LIBOR-OIS spread should serve as a measure for determining when markets have returned to normal. 168 basis points does not seem normal to me.
FED FUNDS FUTURES (November 8, 2008)
Based upon the 30-Day Federal Funds futures contract for the December 2008 expiration is yielding an implied rate of .47% and currently pricing in a 100% chance that the FOMC will decrease the target rate by 50 basis points to .50% on 12/16/2008. The gap change between Long Term Treasury yields and the Fed Fund Rate can indicate growth direction. The gap increasing between the two rates may indicate slower growth may be near.
FED FUNDS FUTURES (October 31, 2008)
Based upon the 30-Day Federal Funds futures contract for the December 2008 expiration is yielding an implied rate of .64% and currently pricing in a 100% chance that the FOMC will decrease the target rate by 25 basis points to .75%, and a 44% chance of a 50 bps cut to .50% on 12/19/2008. The gap change between Long Term Treasury yields and the Fed Fund Rate can indicate growth direction. The gap increasing between the two rates may indicate slower growth may be near.
 

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