In late July, The Federal Reserve cut rates for the first time since 2008 when it announced a quarter-point cut in interest rates.
The rate cut directly impacts banks and other financial institutions who use short-term borrowing, but it also affects consumers.
At its core, the cut is intended to make loans and funding accessible. For those who invest in CDs and the like, a cut means a little lower return.
The average rate on a 30-year mortgage fell to 3.75 percent, down from a high of almost 5 percent in 2018. According to The New York Times, the rate on the average five-year loan for a new car was just under 4.75 percent.
All in all, a modest rate cut does not impact the average consumer’s daily life or pocketbook. But the idea is that a rate cut could hold off a recession and layoffs.
Rick Good spent ten years in the newspaper business, including with The News & Observer (Raleigh, NC) and The Greenville News (Greenville, SC). He co-wrote, with Melinda Coleman, Rutledge to Riley: Governors of South Carolina, 1776–Present (Published by The Greenville News), and is the author of Mind Games Trivia #1 (Amazon). He has recently spent 15 years creating original trivia content through Sounds Good Mobile Entertainment and continues that with his new company, SGME Software. He edits The Smart Reader’s money, real estate, and business coverage.