The most recent widely covered move in the main U.S. policy interest rate was a cut of 0.25 percentage points (25 basis points) in December 2025, which was the Federal Reserve’s third straight quarter‑point cut in that cycle. That brought the federal funds target range down to 3.50%–3.75% , from a peak well above 5% during 2023–2024.

Quick Scoop: What actually dropped?

When people ask “how much did the interest rate drop,” they’re usually referring to one of two things:

  • The Federal Reserve’s policy rate (federal funds rate).
  • Consumer rates like mortgage rates that move in response.

Recent developments:

  • The Fed cut rates three times in 2025 , for a total drop of about 1.75 percentage points since the cutting cycle began in September 2024.
  • The latest cut (December 2025) was 0.25 percentage points (25 bps) , taking the current target range to 3.50%–3.75%.
  • Markets expect the Fed to pause at the January 2026 meeting , so no additional drop is currently anticipated right away.

On the mortgage side :

  • Average 30‑year mortgage rates fell through 2025, landing around the low‑6% range by early 2026 after being well above 7% at prior peaks.
  • One forecast notes that rates ended 2025 at roughly 6.15% and slipped slightly to about 6.11% in early January 2026—so only a small recent drop , but a much larger drop compared with the highs earlier in the rate‑hike era.

Simple example

If you look just at the latest Fed move:

  • Before the December 2025 decision: policy rate range was 3.75%–4.00% (implied by the 0.25‑point cut).
  • After the decision: 3.50%–3.75%.

So, to answer the question “how much did the interest rate drop?” in the narrow, latest‑headline sense:

The Fed’s most recent cut was 0.25 percentage points (25 basis points) , within a broader series of cuts totaling about 1.75 percentage points since late 2024.

If you meant a specific country or a specific type of interest rate (credit cards, car loans, savings accounts), tell me which one and I can narrow that number down.