Fed's Interest Rate Falls 16.17% Year-Over-Year, Now at 3.63%

The Federal Reserve's federal funds rate currently stands at 3.63% for June 2026, down 16.17% compared to the same period last year — June 2025, when it was at 4.33%. This data comes from the Federal Reserve and is compiled and maintained by the Federal Reserve Bank of St. Louis (FRED). For Vietnamese Americans sending remittances to Vietnam, buying homes, or monitoring credit card interest rates, this is not a temporary fluctuation over a few weeks, but rather a long-term picture of a full year of monetary policy shifting in a clear direction.

Compared to the peak of the past 12 months — the 4.33% level recorded in July and August 2025 — the current rate has dropped to the lowest point of this same period, precisely 3.63% in June 2026. The average for the entire 12-month period is 3.87%, meaning the current level is 6.1% lower than that average. Looking further back, across the entire history of 480 data periods from July 1986 to now, the rate has reached as high as 9.85% and as low as 0.05%. The current 3.63% falls around the 52nd percentile across this entire 40-year historical range — essentially near the middle of the fluctuation band over the past four decades, not at an extreme level.

Federal Reserve's federal funds rate (long-term history)

Notably, the two most recent periods — May and June 2026 — both held steady at 3.63%, with no change (0.0%), so the short-term trend is classified as flat. However, this flat reading is merely a temporary pause after a long declining streak: from 4.33% in mid-2025, the rate has gradually retreated month by month — 4.22% in September, 4.09% in October, 3.88% in November, then 3.72% in December 2025 — before stabilizing around 3.63% to 3.64% throughout the first half of 2026.

For the Vietnamese American community, the practical significance lies in this: bank savings rates, credit card interest rates, and mortgage rates in the United States are all closely tied to this federal funds rate. A year ago, when the rate was at its peak of 4.33%, borrowing costs — from auto loans to home mortgages — were higher than they are now. The fact that the rate has retreated to the lowest point of the past 12 months, even though it has flatlined over the two most recent periods, shows that the borrowing environment in the United States is easier than it was a year ago, though it remains far from the historical low of 0.05% that was recorded over the past 40 years.

For those sending remittances, lower U.S. interest rates often come with pressure on exchange rates and conversion costs, so this is a factor worth monitoring alongside the USD/VND exchange rate when planning to send money to Vietnam. The lesson from this data series does not lie in the flat 0.0% movement last month, but rather in the 16.17% difference compared to a year ago — that is the true measure for those calculating borrowing costs or long-term financial planning in the United States this year.

Data source: Federal Reserve (FRED) ↗ · Chart and analysis by Saigon Sentinel