Summary
The Federal Reserve is likely to cut interest rates by 0.25 percent in response to inflation and a weak job market. This decision will affect borrowing costs for loans and credit, but it may also reduce interest earnings on savings accounts.
Key Facts
- The Federal Reserve is considering a 0.25 percent interest rate cut.
- The rate cut aims to balance inflation with the need to improve the job market.
- Financial markets consider a 25-basis-point cut almost certain, with a 96% probability.
- Inflation is above the 2% target, sitting at 2.9% over 12 months.
- The job market is weaker than expected, with job growth not meeting forecasts.
- Lower interest rates would reduce borrowing costs for loans and credit, making it cheaper for consumers.
- Mortgage rates may not drop much further as the cuts are already expected by the market.
- Reduced rates could result in lower interest income on savings accounts and similar products.
