Federal Funds Rate in 1987
Federal Funds Rate opened 1987 at 6.43% and closed at 6.77%, a +5.29% move for the year. The high of 7.29% was reached on October 1, and the low of 6.10% on February 1.
Monthly Breakdown
| Month | Open | Close | High | Low | Change |
|---|---|---|---|---|---|
| Jan | 6.43% | 6.43% | 6.43% | 6.43% | +0.00% |
| Feb | 6.10% | 6.10% | 6.10% | 6.10% | +0.00% |
| Mar | 6.13% | 6.13% | 6.13% | 6.13% | +0.00% |
| Apr | 6.37% | 6.37% | 6.37% | 6.37% | +0.00% |
| May | 6.85% | 6.85% | 6.85% | 6.85% | +0.00% |
| Jun | 6.73% | 6.73% | 6.73% | 6.73% | +0.00% |
| Jul | 6.58% | 6.58% | 6.58% | 6.58% | +0.00% |
| Aug | 6.73% | 6.73% | 6.73% | 6.73% | +0.00% |
| Sep | 7.22% | 7.22% | 7.22% | 7.22% | +0.00% |
| Oct | 7.29% | 7.29% | 7.29% | 7.29% | +0.00% |
| Nov | 6.69% | 6.69% | 6.69% | 6.69% | +0.00% |
| Dec | 6.77% | 6.77% | 6.77% | 6.77% | +0.00% |
Events During 1987
Mexico defaulted on its external debt in August 1982, triggering a seven-year crisis that engulfed Brazil, Argentina, Chile, and most of Latin America. The "lost decade" reshaped emerging market finance.
G5 finance ministers agreed at the Plaza Hotel in New York to coordinate intervention that weakened the dollar. The accord engineered a 50% decline in DXY over two years and set the stage for the 1987 crash and Japan's bubble.
The Dow Jones Industrial Average fell 22.6% on October 19, 1987, the largest single-day percentage decline in history. Portfolio insurance and program trading amplified the crash.
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