The Federal Reserve has lowered interest rates for the fourth time this year, aiming to stimulate the economy. While this could lead to lower borrowing costs for some, the impact will vary depending on individual factors like loan size, credit score, and market conditions. Experts warn that inflation concerns could lead to a change in course by the Fed.
The rate was lowered by 25 basis points to a target range of 4.25% to 4.50% — a full 1% drop since September. The federal funds rate influences borrowing costs for credit cards, loans, auto financing and, more indirectly, mortgages.year-over-year rate of 9.1%, Fed Chair Jerome Powell expects it to"continue to come down toward our 2% objective, albeit on a sometimes bumpy path," he said in a November speech.
However,"if the proposed Trump tax cuts and increased tariffs serve to exacerbate inflation, the Fed would likely change course and exercise more caution," says Robert Johnson, professor of finance at Creighton University's Heider College of Business.
FED INTEREST RATES INFLATION ECONOMY BORROWING COSTS
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