Federal Reserve Initiates First Rate Cut in Four Years to Boost Labor Market and Lower Borrowing Costs

Last Wednesday (September 18, 2024), the Federal Reserve took a bold step by lowering its benchmark interest rate by half a percentage point—marking the beginning of an aggressive policy shift aimed at strengthening the U.S. labor market. The Federal Open Market Committee voted 11 to 1 to reduce the federal funds rate to a range of 4.75% to 5%, following over a year of holding it at its highest level in two decades. This is the Fed’s first rate cut in more than four years.

Key Highlights:

• Even small percentage changes can significantly impact the interest you pay on loans and credit cards.
• Credit scores and other factors play a major role in determining credit approval and the interest rates you’re offered.
• A lower interest rate means you’ll pay less over the life of a loan or on credit card purchases.

This rate cut presents an opportunity for consumers to benefit from lower borrowing costs and manage their finances more efficiently.