In a surprising turn, the Federal Reserve cut the federal funds rate by 0.5% in September, marking its first reduction since 2020. This shift is a response to approaching inflation targets and is anticipated to lower borrowing costs for consumers. Further rate cuts are expected, which may impact interest rates on credit cards, loans, and mortgages, though savings rates could decrease as well.
Read the article to know how this policy move signals the Fed’s confidence in economic stabilization while addressing inflation control.
https://www.experian.com/blogs/ask-experian/latest-personal-finance-news/
Vocabulary Questions:
- What does “curtail” mean? “It’s also the first time since July 2023 the committee adjusted the rate, which reached its highest level in more than 20 years after a sharp series of hikes implemented in an effort to curtail inflation.” Use it in a sentence.
- What does “pummel” mean? “Persistently high inflation rates have pummeled consumers’ wallets over the past few years.” Use it in a sentence.
- What does “crucial” mean? ” As such, it’s crucial that you submit your application as quickly as possible once it becomes available.” Use it in a sentence.
Discussion Questions:
- What do you think are some of the reasons behind the Federal Reserve’s decision to cut interest rates?
- How might lower interest rates affect people with mortgages or credit card debt?
- Do you think cutting rates will have a big impact on inflation, or will it take time to see the effects?
- In what ways might these rate cuts influence the economy over the next few years?