Fed rate cut: How it affects your bank accounts, loans, credit cards, and investments

Published On Dec 18, 2024, 2:00 PM

The Federal Reserve's recent interest rate cuts, lowering the target federal funds rate from 5.25% to 4.25%, will have various impacts on consumer financial products and investments. Checking and savings account rates are expected to decrease slightly. High-yield savings accounts, previously yielding 4-5%, may drop below these levels as well. Mortgage rates are unlikely to see immediate reductions even with Fed cuts, remaining in the 6-7% range. Rates on personal loans are also expected to remain stable at around 12%. Credit card interest rates have surged and might see some relief soon. Overall, lower interest rates generally stimulate economic growth and could benefit the stock market long term, but investors should maintain their strategies without making hasty adjustments.