The costs of 30-year mortgages and new car loans have been inching down in recent months, welcome news for borrowers who have endured years of high prices and high interest rates.
These borrowing costs are expected to fall further: The Federal Reserve cut its benchmark interest rate on Wednesday, with more cuts anticipatedto come.
When the Fed lowers its benchmark rate, it is ultimately trying to reduce borrowing costs for businesses and consumers. Setting rates is one of the key ways the Fed can try to speed up or cool down the economy, which can include what lenders offer prospective homeowners, car buyers and other consumers.
Wednesday’s announcement was the first time in more than four years that Fed cut rates, following a long fight to tamp down a surge in inflation spurred by pandemic-related supply chain snarls and other factors.
Borrowing costs hit a two-decade high as part of the Fed’s inflation fight.
A variety of factors go into the Fed’s decision to change rates, including the strength of the labor market. Hiring throughout much of the U.S. economy has been healthy in recent months, with wages still growing and many Americans still eager to work.
Unemployment, however, has been slowly rising, and wage growth has begun to slow.
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That has raised questions about whether the Fed waited too long to begin lowering rates. It has also contributed to many people’s anxieties about the state of the economy.
Even as inflation has cooled, months of rapid price increases have left a lasting mark for many consumers. And the costs of many household items, big-ticket purchases and crucial services remain high for many people.
While Wednesday’s news will likely bring relief for shoppers and borrowers, the effects of Fed rate changes are not instantaneous, and it could be months before credit card APRs, mortgage costs and other interest rates meaningfully change.
President Biden’s top antitrust enforcers have promised to sue monopolies and block big mergers — a cornerstone of the administration’s economic agenda to restore competition to the economy.
Below are 15 major cases brought by the Justice Department and Federal Trade Commission since late 2020 (including cases against Google and Meta initially filed during the Trump administration just before Mr. Biden took office).
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The government has won several but not all the cases. And with only a few months remaining for the current administration, the number of suits is climbing, as regulators go after dominant companies in tech, pharmaceuticals, finance and even groceries.
new video loaded: Federal Reserve Cuts Interest Rates for the First Time in Four Years
transcript
transcript
Federal Reserve Cuts Interest Rates for the First Time in Four Years
Jerome H. Powell, the Fed chair, said that the central bank would take future interest rate cuts “meeting by meeting” after lowering rates by a half percentage point, an unusually large move.
Today, the Federal Open Market Committee decided to reduce the degree of policy restraint by lowering our policy interest rate by a half percentage point. Our patient approach over the past year has paid dividends. Inflation is now much closer to our objective, and we have gained greater confidence that inflation is moving sustainably toward 2 percent. We’re going to take it meeting by meeting. As I mentioned, there’s no sense that the committee feels it’s in a rush to do this. We made a good, strong start to this, and that’s really, frankly, a sign of our confidence — confidence that inflation is coming down.