The FOMC gathers for eight regularly scheduled meetings each year to discuss economic and financial conditions and to deliberate on monetary policy. In each meeting, the FOMC establishes a target range for the federal funds rate. Figure 1 shows the upper bound in red and the lower bound in blue of the federal funds target range since 2015.
We see the range increasing in 2018 as the job market was strengthening and inflation was moving up toward 2 percent. That’s right—for much of the decade before then, the inflation rate was below 2 percent. In March 2020, when the COVID-19 pandemic hit the economy, the FOMC quickly moved the target range down to near zero to support economic activity.