(KOAM) – The Federal Reserve has reduced its benchmark interest rate for the first time in more than four years, cutting it by a half-percentage point to a range of 4.75% to 5%.
This marks a shift after 11 rate hikes since March 2022, as the Fed now feels inflation has eased enough to lower borrowing costs. The decision also reflects growing concerns about the health of the job market.
Lower interest rates will impact various aspects of consumer and business borrowing, including auto loans, mortgages, credit cards, and personal loans. While this cut may provide relief to borrowers, savers could see declining yields on savings accounts and certificates of deposit.
Auto loan rates are expected to fall, although experts suggest it may take more cuts before consumers see substantial relief, particularly those with weaker credit profiles. Mortgage rates, while not directly tied to the Fed’s rate, tend to move in the same direction, with some decline already observed.
The Fed’s decision aims to support job growth and stabilize unemployment while continuing to monitor inflation.
According to Further rate cuts are expected, depending on how inflation and employment trends evolve in the coming months.
COPYRIGHT 2024 BY KOAM NEWS NOW. ALL RIGHTS RESERVED. THIS MATERIAL MAY NOT BE PUBLISHED, BROADCAST, REWRITTEN OR REDISTRIBUTED.