The Federal Reserve lowered its benchmark interest rate by half a percentage point on Wednesday, marking the first reduction in borrowing costs since March 2020. This move aims to provide relief to Americans facing rising credit card, personal loan, auto financing, and mortgage costs while acknowledging slowing inflation and job growth.
Andrew Harnik | Getty Imagesto its benchmark interest rate on Wednesday — the first reduction in borrowing costs since March 2020.
Prior to Wednesday's cut, the Fed had implemented 11 consecutive rate hikes over the past two years in an effort to tame inflation, whichWhile the current inflation rate of 2.5% is still below the Fed's 2% target, the central bank is confident that price growth is on a sustained downward path. While a rate cut of half a percentage point will reduce borrowing costs, don't expect more than a few bucks off most loan payments each month. That said, those small savings can really add up if you've got multiple debts, which is true for many Americans.
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