(AmericanProsperity.com) – The Federal Reserve has cut interest rates for the first time in over four years, lowering their benchmark rate by half a percentage point. This serves as a critical pivot for the central bank after four years of multiple rate increases due to the pandemic and its aftermath.
The rate cut will provide relief for consumers who have been waiting to buy a home or a vehicle, and for those who have a lot of credit card debt; it also could be the first of many rate cuts this year and into next, affecting things like mortgage rates and auto loan rates.
Sara Rathner, co-host of the Smart Money podcast and personal finance expert for NerdWallet, said, “It’s been a long marathon — the Fed feels it’s time to lower interest rates again. Consumers are definitely feeling the pinch. It’s been this one-two punch of higher interest rates and inflation.”
She said that the rate cut will “present an opportunity for consumers to take a look at their finances and save money on some of their borrowing.”
The Fed’s meeting is being held in September, and a decision will be announced by the afternoon, Easter Standard Time, on September eighteenth. The decision will be followed by a press conference with Jerome Powell, Fed chairman, where he will discuss the central bank’s economic outlook.
Before hearing what the rate cut would be, some expected it to be the normal fourth of a percentage rate cut, while others expected a larger rate cut of half a percentage. Regardless of what the rate cut would’ve been, it was going to provide some relief to borrowers.
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