The Federal Reserve’s interest rate cut decision will be announced at 2 p.m. ET today|Ken Lund|CC BY-SA 2.0
The Federal Reserve will announce its first rate cut in four years today. Experts are waiting to find out whether the central bank will reduce the benchmark interest rate by 0.25% or 0.5%.
While some think the latter would be better, others worry that cutting too much too soon could cause inflation to rise again.
Any rate cut would help alleviate some financial stress individuals and businesses have felt for the past year. Any reduction in rate will reduce borrowing costs.
For individuals, lower rates are good news—especially those looking at a home or auto purchase. Mortgage rates have already slid, anticipating a rate cut.
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Due to improved affordability, homebuying will become a little easier as more people enter the market.
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Experts predict auto loan rates will reduce after the rate cut, and the annual percentage rate on credit cards will also go down.
However, high-yield savings accounts, which have seen APYs as high as 5%, might see interest rates reduced.
For businesses, cheaper loans may lead to more mergers and acquisitions, benefiting investment banks. However, this would also mean banks would make lesser profits on loans and mortgages.
Fed Chair Jerome Powell will announce the rate cut decision at 2 p.m. ET.