The Fed Just Cut Interest Rates. Here’s What That Means for You.
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The quarter-point cut is unlikely to get you a better mortgage rate. At least, not right away.
Americans juggle a lot of interest rates in their daily lives. They pay interest on car loans, credit card balances and mortgages. They earn interest, at least a little, on the money they save with banks.
Technically speaking, Federal Reserve officials did not touch any of those rates when they announced a quarter-point interest-rate cut on Wednesday, the first cut in a decade. The rate they reduced is the federal funds rate, which is what banks and other financial institutions charge one another for very short-term borrowing.
The effect is not always direct or immediate, so consumers probably will not wake up on Thursday to find that all of their favorite rates have changed by a quarter of a point.
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