Source:  The New York Times.

Dear Commons Community,

As expected, the Federal Reserve cut interest rates yesterday by half a percentage point. This rate cut will have ramifications for consumers, savers, and the overall economy.  For consumers, it will mean lower interest rates on mortgages, car purchases, and credit-card debt. For savers, it will mean lower interest rates on CDs.  For the overall economy, here are six takeaways courtesy of The New York Times.

• The Fed’s decision lowers rates to about 4.9 percent, down from a more than two-decade high.
• Fed officials lowered interest rates because they are confident that inflation is coming back down to their 2 percent goal, and now they want to prevent the job market from softening further.
• Central bankers expect to cut interest rates more in the months to come, but they are not on a preset path, Mr. Powell said. They could speed up if the economy is weak and slow down if it’s strong.
• The Fed is keeping a wary eye on the uptick in unemployment, but for now it thinks the economy is basically strong.
• The Fed is feeling “growing confidence” that it can pull off the soft economic landing by lowering interest rates.
• In short, the Fed has pivoted to its rate cutting era, and there is more to come.

All in all, this should be good news for most Americans!

Tony

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