The Federal Reserve’s decision Wednesday to lower its key interest rate by half a percentage point brought some clarity to the country’s top financial decision-makers, sending stocks surging to all-time highs and finally quieting the “will they, won’t they” debates among economists. But many people are still wondering, what does a rate cut mean for my money?
“The U.S. economy is in a good place,” Fed Chair Jerome Powell said at a news conference following the announcement. “And our decision today is designed to keep it there.”
Indeed, inflation has cooled significantly since the highs of the pandemic era, but questions remain about who’s actually feeling the slack. On top of stubborn food and energy costs, credit card debt is at a record $1.14 trillion, with the average balance per consumer standing at $6,329, up 4.8% year over year. Last quarter, the U.S. homeownership rate for those under the age of 35 decreased to 37.4%, the lowest level in four years.
For those who’ve been waiting it out, the rate cut “will instill some hope in folks,” said Elizabeth Renter, senior economist at NerdWallet. “Now there’s this sort of beginning to the end people are going to have in mind that, ‘OK, this is close enough that I can see it coming now,’ and I think that’s going to provide some relief.”From tackling credit card debt to tiptoeing…
