Now to the highly anticipated announcement from the Federal Reserve,
expected to cut interest rates this afternoon for the first
time in four years.
Chief economics correspondent Rebecca Jarvis is here with what it
means from car loans to mortgages.
Good morning, Rebecca.
Big impact here, Michael.
Good morning.
And this is a major milestone in the Fed's fight
against inflation.
While we won't hear Fed Chair Powell outright declare victory,
we do expect to see the Fed cut rates for
the first time in four years.
The question now is how low could they go?
Right now, rates are at their highest in more than
two decades between 5:00 and 1/4 and 5 1/2 percent.
Economists expect either half a percentage or 1/4 percent cut.
So what does it mean for your wallet?
Well, it's going to be cheaper to borrow money.
Think less expensive mortgages, car loans and credit card debt.
If you've been carrying a balance on your credit card,
you felt the sting of high rates with the average
APR now a staggering 28%.
Nearly a rate cut will mean a decrease there.
Meantime, 30 year fixed rate mortgage have been taking lower
already in anticipation of this cut.
The average is about 6.2% today.
It's down from a recent high last October near almost
8%.
They should continue to move lower in real turns.
If you set out to buy a $423,000 home, that's
the median sale price last October when mortgages were almost
8% your monthly payment, it would have been about $2500.
But at today's rates, that same house will cost you
about 400 dollars less or $2100 a month.
Now, the reason the Fed is doing this right now,
inflation is now at a three-year low.
It's well below the 9% peak.
It is back in what they would consider the normal
zone where the Fed wants to see it at 2
1/2 percent.
Meantime, unemployment still historically low, 4.2%, but it is starting
to take higher.
You may have heard this term soft landing.
That is exactly what the Fed is trying to do
here.
They want to land this plane nice and easy.
George.
OK, Rebecca, thank.