The prime rate can change up to eight times a year, once at each scheduled meeting of the Federal Reserve’s Federal Open Market Committee (FOMC). It often changes far less often than that. The committee frequently votes to hold rates steady, and during calm stretches the prime rate has gone years without moving. As of early 2026, it sits at 6.75%, reflecting a federal funds target range of 3.50% to 3.75%.1Federal Reserve Board. H.15 – Selected Interest Rates (Daily)
Why the Timing Is Tied to the Fed
The prime rate is the baseline interest rate large commercial banks charge their most creditworthy business borrowers. By long-standing convention, banks set it exactly 3 percentage points above the upper end of the federal funds target range.2Board of Governors of the Federal Reserve System. What Is the Prime Rate, and Does the Federal Reserve Set the Prime Rate With the target range at 3.50% to 3.75%, prime lands at 6.75%. When the FOMC moves the target up or down, prime shifts by the same amount on the same day.
That rigid link is the reason prime rate changes track the Fed’s meeting calendar. Prime never moves independently. It changes only when the FOMC votes to change the federal funds rate.
The 2026 FOMC Meeting Calendar
The FOMC holds eight regularly scheduled two-day meetings a year, spaced roughly six to eight weeks apart.3Federal Reserve Board. Federal Open Market Committee – Meeting Calendars and Information The 2026 dates are:
- January 27–28 (completed, rate held at 3.50%–3.75%)4Federal Reserve. Minutes of the Federal Open Market Committee – January 27-28, 2026
- March 17–18
- April 28–29
- June 16–17
- July 28–29
- September 15–16
- October 27–28
- December 8–9
Each meeting ends with a public statement, typically released at 2:00 p.m. Eastern on the second day, announcing whether the target range was raised, lowered, or left unchanged. If the range moves, major banks update their posted prime rates that same day or the next business day. The Federal Reserve tracks prime as the figure posted by a majority of the 25 largest U.S.-chartered commercial banks by domestic assets.1Federal Reserve Board. H.15 – Selected Interest Rates (Daily)
Off-Calendar Changes
The FOMC can also convene unscheduled emergency meetings and change rates outside the normal calendar.5Federal Reserve Bank of St. Louis. Introduction to the FOMC (Federal Open Market Committee) It happened twice in March 2020 at the onset of the COVID-19 pandemic, when the committee cut a combined 1.50 percentage points within 13 days. It also happened during the 2008 financial crisis and after the September 11, 2001 attacks. These events are uncommon, and decades can pass between them, but they mean the prime rate can technically change on any business day during a crisis.
How Often the Prime Rate Actually Moves
Eight opportunities a year does not mean eight changes. In practice, the frequency swings dramatically with economic conditions.
- During the 2022–2023 inflation fight, the Fed raised rates at ten consecutive meetings, pushing prime from 3.25% to 8.50% in roughly 16 months.
- The Fed then reversed course with a series of cuts in late 2024 and 2025, bringing prime down to its current 6.75%.1Federal Reserve Board. H.15 – Selected Interest Rates (Daily)
- After the 2008 financial crisis, the FOMC held the federal funds rate near zero from December 2008 through December 2015. Prime sat at 3.25% for that entire seven-year stretch.
The pattern over recent decades shows clusters of rapid changes separated by long plateaus. A borrower with a variable-rate loan might see no rate adjustment for years, then face several changes within a single year.
What Drives the FOMC’s Decisions
Congress gave the Federal Reserve a dual mandate: maximum employment and price stability. The committee weighs both when deciding whether to move rates.
On the price side, the FOMC targets a 2% annual inflation rate, measured by the Personal Consumption Expenditures (PCE) price index rather than the more widely reported Consumer Price Index.6Federal Reserve Board. Inflation (PCE) When PCE inflation runs above 2%, the committee leans toward raising rates to cool the economy. When inflation drops below target, cuts become more likely.7Federal Reserve Bank of Cleveland. Inflation Explained – Your Guide to Inflation Basics
On the employment side, monthly jobs reports, the unemployment rate, and GDP growth all factor in. An overheating labor market can push the committee to raise rates even before inflation spikes. Slowing job growth or rising unemployment can prompt cuts. At the January 2026 meeting, participants observed that economic activity was expanding at a solid pace and generally expected growth would remain solid through the year.4Federal Reserve. Minutes of the Federal Open Market Committee – January 27-28, 2026
Four of the eight annual meetings, in March, June, September, and December, include the Summary of Economic Projections. It contains the “dot plot” showing where each FOMC member expects the federal funds rate to be at year-end and beyond.8Federal Reserve. FOMC Projections Materials The dot plot doesn’t bind the committee, but it gives borrowers a rough sense of whether rates are likely to rise, fall, or hold.
What a Prime Rate Change Means for Your Loans
If you have a loan or credit line with a variable interest rate, prime rate changes flow through directly. Lenders calculate your rate as the prime rate (the “index”) plus a fixed number of percentage points (your “margin”) set when you opened the account.9Consumer Financial Protection Bureau. For an Adjustable-Rate Mortgage (ARM), What Are the Index and Margin, and How Do They Work If your credit card has a margin of 15 percentage points and prime is 6.75%, your APR is 21.75%. A half-point drop in prime brings it to 21.25%.
Products commonly tied to the prime rate include variable-rate credit cards, home equity lines of credit, some adjustable-rate mortgages, and SBA 7(a) small business loans, which are capped at prime plus a spread of 3.0% to 6.5% depending on the loan amount.10U.S. Small Business Administration. Terms, Conditions, and Eligibility Fixed-rate loans, including most conventional mortgages and federal student loans, are not affected once you close. The rate you locked in stays the same regardless of what the FOMC does.
One thing worth knowing: for credit cards tied to a variable rate that moves with a publicly available index like the prime rate, your card issuer does not have to give you advance notice before your APR increases.11eCFR. 12 CFR 1026.9 – Subsequent Disclosure Requirements The new rate simply appears on your next statement. If you want to see rate changes coming, the FOMC meeting calendar is the place to watch. Your rate will adjust shortly after any announced change.