Federal Reserve Chairman Jay Powell fielded a lot of questions today after the announcement that the Federal funds rate will be cut by 25 basis points to a target rate of 2.00 – 2.25%. He characterized the cut as a mid-cycle ‘adjustment of policy’ — and that it is a way to brace against downside risks. (Um, another way to ‘brace against downside risks’ would be for the Trump Administration to stop the never-ending tariff wars with China and others).
That means savers will earn even less money on their savings. Borrowers for say home loans, may get a little relief from lower borrowing rates .. but 0.25% will barely make a difference on an 18% annual rate on a credit card!
