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.
