The Fed is set to cut rates for the first time in 4 years. What does that mean for your money?
CBSSEP 20 2024
The Federal Reserve on Wednesday cut benchmark interest rates by half a percentage point — 50 basis points — to the 5% to 4.75% range in the face of softening inflation and a potential slowdown in the labor market.
This is the first time the central bank's Federal Open Market Committee (FOMC) cut rates by as much as half a point since 2008 outside of emergency rate cuts made during the COVID-19 pandemic.
Interest rates since July 2023 have been at their highest since 2001 at around 5.25% to 5.5% while the Fed waited for inflation to get closer to a goal of 2%. Inflation slowed to 2.5% on an annual basis this August. Inflation peaked at around 9% in 2022.
The Biden-Harris economy is well on its way to a full recovery. The Fed needed to normalize interest rates after their huge fall, and this rate cut will help the economy stick the landing and avoid a recession. This should sway more voters away from former Pres. Donald Trump to VP Kamala Harris.
Aside from the Fed breaking tradition by cutting rates so close to Election Day — and possibly influencing the outcome of the election — this giant cut shows how poorly the Biden-Harris economy is doing. The economy needed this jolt just to show any sign of life, but it's not enough to help the average AmericanAmericans.