The U.S Federal Reserve has announced its second consecutive interest rate cuts, slashing the federal funds rate by 25 basis points.

“The Committee judges that the risks to achieving its employment and inflation goals are roughly in balance,” the fed said in minutes from their meeting explaining their decision.

The move, which was widely expected, reduces their overnight borrowing rate to a target range of 4.50%-4.75%.

Higher interest rates make it more expensive for companies and individuals to borrow funds, which in turn, restricts access to cash and constrains their ability to spend, reducing pressure on prices.

Mortgages are also tied to yields for government bonds, and have an affect on housing prices as well.