The U.S Federal Reserve has enacted its first interest rate cuts in four and a half years, cutting the federal funds rate by 50 basis points.
It’s the first cut to the federal funds rate since March 2020, bringing rates down to 4.75% – 5% from the 5.25% to 5.5% range they have been at since last July, which in turn had been the highest rates since 2001.
“The Committee has gained greater confidence that inflation is moving sustainably toward 2 percent, and judges that the risks to achieving its employment and inflation goals are roughly in balance,” the fed said in its statement.
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.
Mortgage rates havr been falling slowly in recent months and already hit a 19-month low last week of 6.2% on 30-year fixed loans, ahead of today’s expected decision.
wow who actually cares??
The “Vaad” so that they can tell you to vote for the democrats
The rule of thumb is: When interest rates are cut, people have less interest in the matter because their interest has been reduced.
In other words: The higher the interest, the more interest people have, and vice versa, the lower the interest, the less interest people have, and the less they care about it.