Okay so the fed just cut interests rates by half a point. Can someone explain how this might affect my day to day life? How might it be different if it were, for example, 0.75? Or 2.0?
In: Economics
The fed is like a bank for banks. The cheaper banks can borrow money, the cheaper they can loan money out to other people. If you planned on taking a loan for something it’s possible you can get a better deal here in the coming months. It also makes it more affordable for companies to finance things like expansion or new business ventures.
The downside is that bank account interest rates will probably drop and cheap credit can often result in higher prices as money becomes cheaper to borrow.
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