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Editor’s note: this article has been updated from its original publish date of July 29, to include new information.
In July 2019, The Federal Reserve cut rates for the first time since the financial crisis. Now, it has cut rates again—for the fifth time in eight months. This time, it is directly tied to the spread of COVID-19—more widely known as the coronavirus.
“The coronavirus poses evolving risks to economic activity,” the Fed said in a statement. “In light of these risks and in support of achieving its maximum employment and price stability goals, the Federal Open Market Committee decided today to lower the target range for the federal funds rate.”
Americans may want to prepare now for some changes to their finances—especially given the macroeconomics around this particular cut. This action has the potential to affect savings, credit cards, student loans, mortgages, and investment portfolios.
Curious about how the process of cutting and hiking rates works? Wondering how the rate announcement by the Federal Reserve may affect you? Read on for a high-level overview of information that may be helpful as you plan for the near future and beyond.Read more