WASHINGTON, D.C. – For the first time since early 2020, the Federal Reserve is cutting interest rates. The Feds have kept these rates at some of the highest points within the past 23-years to aggressively fight inflation.
The Feds are reducing the high rate by half a percentage. They’re confident in making this change because they said the economy is growing at a good pace and inflation has cooled down towards their goal of getting it to two percent.
High interest rates slow the economy by making it more expensive to borrow money, expand a business and has an impact on hiring people. Some economists believe lowering these rates will bring relief to many Americans like making it easier for them to buy a home, get lower car loans which makes buying a car more affordable and more.
Looking towards the future, Federal Reserve Chairman Jerome Powell said they’re not in a rush to make more cuts.
“We made a good strong start to this and really that’s frankly a sign of our confidence that inflation is coming down towards two percent on a sustainable basis,” said Powell. “That gives us the ability we can make a good strong start and I’m very pleased that we did.”
Officials said their job of fighting inflation is still not done. While they do predict they could cut interest rates again by the end of the year, they’re going to keep an eye out on how this reduced rate impacts the economy and inflation.
