On Thursday, the Federal Reserve’s Federal Open Market Committee (FOMC) announced that it would lower the federal funds rate by 25 basis points (bps), or 0.25%, because of “somewhat elevated” inflation and an unemployment rate that “moved up but remains low.”
The rate is now 4.5% to 4.75%, down from 4.75% to 5%. A lower federal funds rate, or borrowing rate that banks charge each other, means lower borrowing costs on credit cards and personal loans — so there’s a ripple effect that could directly affect your wallet. Banks decide individually how to respond to rate cuts.
The news aligned with analyst expectations.
“We continue to expect the Fed to ease
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