The Federal Reserve Cuts Interest Rates: What It Means for You

What Happened?

On Wednesday, July 31, 2019, the Federal Reserve announced a 25 basis point cut to the target range for the federal funds rate. This was the first rate cut since December 2018.

Why Did the Fed Cut Rates?

The Fed cut rates in an effort to boost economic growth and inflation. The economy has been slowing in recent months, and inflation has been below the Fed's target of 2%. The rate cut is designed to make it cheaper for businesses to borrow money and invest, which should lead to more economic growth.

What Does This Mean for You?

The rate cut could have a number of implications for you. - **Lower borrowing costs:** The rate cut will make it cheaper for you to borrow money. This could be a good time to refinance your mortgage or take out a loan for a new car or home improvement project. - **Higher stock prices:** Stocks tend to perform well when interest rates are low. This is because low interest rates make it more attractive for investors to put their money into stocks. - **Weaker dollar:** The rate cut could lead to a weaker dollar. This could make it more expensive for you to travel or buy imported goods.

What's Next?

It is unclear what the Fed will do next. The Fed has said that it will continue to monitor the economy and make decisions about interest rates on a meeting-by-meeting basis.

Additional Resources

- [Federal Reserve Announces Interest Rate Cut](https://www.federalreserve.gov/newsevents/pressreleases/monetary20190731a.htm) - [The Fed's Rate Cut: What It Means for You](https://www.nytimes.com/2019/07/31/business/economy/fed-rate-cut.html) - [What the Fed's Rate Cut Means for You](https://www.forbes.com/sites/zackfriedman/2019/07/31/what-the-feds-rate-cut-means-for-you/)