The Federal Reserve cut interest rates by a higher-than-expected half point at its September meeting, marking the first rate cut in over four years. The Fed’s range now sits between 4.75 and 5 percent, which is the lowest we’ve seen since the spring of 2023.

Rate cuts can impact everything from stocks and housing to employment and inflation – so what does this decision mean for the economy right now? 

Why did the Federal Reserve finally cut rates?

Experts have been anticipating a rate cut for months now, but the Fed had to see proof that key indicators were moving in the right direction before they eased up on interest rates. If they pulled back too fast, the Fed risked driving the inflation rate back up. But holding out too long can also lead to trouble for the economy, as hiring, purchasing and borrowing all continue to slow down.

According

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