Bank Prime Loan Rate
Monthly
MPRIME • Economic Data from Federal Reserve Economic Data (FRED)
Latest Value
7.50
Year-over-Year Change
-11.76%
Date Range
1/1/1949 - 7/1/2025
Summary
The Monthly Prime Rate (MPRIME) represents the base interest rate that commercial banks charge their most creditworthy corporate customers. This benchmark rate is crucial for determining borrowing costs across various financial products and serves as a key indicator of overall lending conditions.
Analysis & Context
This economic indicator provides valuable insights into current market conditions and economic trends. The data is updated regularly by the Federal Reserve and represents one of the most reliable sources for economic analysis.
Understanding this metric helps economists, policymakers, and investors make informed decisions about economic conditions and future trends. The interactive chart above allows you to explore historical patterns and identify key trends over time.
About This Dataset
The Prime Rate reflects the current cost of short-term lending and is typically tied to the Federal Reserve's federal funds rate. Economists and financial analysts closely monitor this rate as a fundamental indicator of credit market conditions and potential economic shifts.
Methodology
The rate is calculated based on the base interest rates set by the largest U.S. banks and is typically adjusted in response to changes in the federal funds rate.
Historical Context
Policymakers, investors, and businesses use the Prime Rate to assess lending conditions, make investment decisions, and understand broader economic trends.
Key Facts
- The Prime Rate is a benchmark for many consumer and business loan products
- It typically moves in direct correlation with the Federal Reserve's monetary policy
- Changes in the Prime Rate can impact mortgage rates, credit card interest, and business loans
FAQs
Q: How often does the Prime Rate change?
A: The Prime Rate can change whenever major banks adjust their base lending rates, typically in response to Federal Reserve policy changes.
Q: How does the Prime Rate affect consumers?
A: Many consumer loans, including credit cards and adjustable-rate mortgages, are directly linked to the Prime Rate, meaning changes can impact borrowing costs.
Q: What determines the Prime Rate?
A: The Prime Rate is primarily influenced by the federal funds rate set by the Federal Reserve and the lending policies of major commercial banks.
Q: How do businesses use the Prime Rate?
A: Companies use the Prime Rate to assess borrowing costs, negotiate loan terms, and make financial planning decisions.
Q: Are there limitations to using the Prime Rate?
A: While important, the Prime Rate is just one of many factors in assessing overall economic conditions and is not a comprehensive economic indicator.
Related Trends
Citation
U.S. Federal Reserve, Monthly [MPRIME], retrieved from FRED.
Last Checked: 8/1/2025