The Fed just made a jumbo rate cut. Here are 5 takeaways on what it means for mortgages and more.
CBSN
In making its first interest rate cut in more than four years, the Federal Reserve went big — a decision that took some economists and policy experts by surprise, while also providing cheer to Wall Street and consumers eager for relief from high borrowing costs.
The Federal Reserve on Wednesday lowered its benchmark rate by 0.50 percentage points, or double the more typical 0.25 percentage point cut. The moment marks a critical turning point in the Fed's fight against the hottest inflation in 40 years, which resulted in a flurry of rate hikes that pushed the bank's federal funds rate to its highest in 23 years.
Behind the Fed's decision to make a jumbo cut are its efforts to juggle its so-called "dual mandate" to maintain stable prices — in other words, to keep inflation low — and ensure full employment. But the cut also carries implications for the broader economy, as it will influence consumers' and businesses' decisions about everything from major purchases to saving.
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