September Fed Meeting Live Updates: What the Fed’s big half-point cut means for you

Bankrate’s expert staff has a combined 43 years of experience following the U.S. economy, dissecting the Federal Reserve and breaking down what it all means for your wallet. After the Fed’s first interest rate cut since 2020, follow along to see what our team of reporters, writers, editors and financial experts are watching.

9/18/24, 5:05 p.m. ET

By Sarah Foster, principal U.S. economy and Federal Reserve reporter

Thanks for joining us. We hope you enjoyed today’s live blog and learned something new. Shameless plug: We don’t just cover the Fed during high-profile meetings. Rate hike, rate cut or rate pause (the Fed equivalent of “Rain or shine,” if you will), you can count on our content for insights on how the world’s most powerful central bank could impact your finances.

9/18/24, 4:55 p.m. ET

By Sarah Foster, principal U.S. economy and Federal Reserve reporter

9/18/2024, 4:50 p.m. ET

By Andrew Dehan, writer, home lending

Now that the Fed has decided to cut its federal funds rate, the majority of our rate watchers predict mortgage rates to stay flat over the next week.

9/18/2024, 4:50 p.m. ET

By Jeff Ostrowski, principal writer, home lending

Mortgage rates fell again this week, with the 30-year fixed rate falling to 6.20 percent, according to Bankrate’s latest lender survey. The benchmark mortgage hasn’t been this low since September 2022, and forecasters say the downward trend could continue — at its meeting this week, the Federal Reserve announced a larger-than-expected rate cut, its first since the pandemic.

“It was a coin flip on whether it was going to be 25 or 50 basis points,” says Bill Banfield, chief business officer at Rocket Companies. “They gave us a little extra.”

Noteworthy: Bankrate’s numbers were collected before the Fed announced its cut. Rates have fallen all the way from 8.01 percent in October 2023 to 6.20 percent now.

9/18/2024, 4:40 p.m. ET

By Lauren Nowacki, senior loans writer

When rates go down, it can be less expensive to borrow. That could make it a good time to finance a big purchase, consolidate debt or complete a home improvement project using a personal loan.

Since personal loan rates are fixed, locking in when rates are low can ensure your interest stays low throughout the life of the loan despite market movements in the future. Even with falling rates, personal loans have higher interest rates than other financing options and may not be the right choice for all borrowers.

To get more affordable personal loan rates, borrowers should compare offers from multiple lenders for the best deal, strengthen their credit score and borrow the least amount of money for the shortest amount of time possible.

9/18/2024, 4:30 p.m. ET

By Logan Moore, investing writer

After a challenging few years for long-term bondholders, a lower interest rate environment may finally offer the potential for gains. The Federal Reserve’s recent 50-basis-point rate cut could push long-term bond prices higher after a period of declining values.

While falling rates bring some opportunities for investors, it’s essential to maintain a diversified portfolio. Here’s what bond investors should know about how the Fed’s rate cut and how it impacts their portfolios.

9/18/2024, 4:20 p.m. ET

By Jim Royal, principal writer, investing and wealth management

9/18/2024, 4:15 p.m. ET

By Michele Petry, senior editor, home lending

Many prospective homebuyers have been sitting on the sidelines for a while now, waiting out the market and hoping for a significant drop in either home prices or mortgage rates. While home prices remain sky-high, the Fed’s rate cut has market-watchers eagerly awaiting its impact on mortgage rates. But how much can a single cut really help the affordability crunch? Is now a good time to buy, or is it better to keep waiting in the hopes of more dramatic change down the line?

9/18/2024, 4:00 p.m. ET

By Linda Bell, senior writer, home lending

The Federal Reserve’s half-point rate cut is welcome news for your home equity line of credit (HELOC) or new home equity loan.

Your HELOC’s fluctuating interest rate should fall, making your monthly payments easier to manage. And if you’re thinking of taking out a home equity loan, its fixed rate probably will be lower now, too.

But still, a larger question remains: Is now really the right time to tap into your housing wealth?

9/18/2024, 3:40 p.m. ET

By Ana Staples, lead writer, credit cards

Rate cuts mean lower interest rates on various types of loans. This presents an opportunity for folks to lighten their debt burdens — and for scammers to take advantage of the situation.

Riding the wave of the consumer’s excitement, scammers might come up with all kinds of appealing offers. They’ll tell you they can lower your interest rates on your mortgage or your credit cards. They’ll promise you a way to reduce your student loan debt. All you need to do is to provide your credit card information.

9/18/2024, 3:30 p.m. ET

By Sarah Foster, principal U.S. economy and Federal Reserve reporter

Fed officials release a post-meeting statement with every decision, providing color to their announcement. One of my favorite things to do as soon as the Fed releases it, is compare it to the prior meeting’s version. Sometimes, changes are immaterial and a snooze. Other times, there are big revisions.

The Fed’s September meeting was one of those instances.

9/18/2024, 3:15 p.m. ET

By Sarah Foster, principal U.S. economy and Federal Reserve reporter

9/18/2024, 3:05 p.m. ET

By Jim Royal, principal writer on investing and wealth management

9/18/24, 2:55 p.m. ET

By Sarah Foster, principal U.S. economy and Federal Reserve reporter

I want to dwell here on the size of the Fed’s rate cut: half a percentage point. The Fed has kicked off a rate-cutting regime with a larger half-point rate cut before — but in those instances, the U.S. economy was clearly facing a downturn. They did it in the early recession of the 1990s, the dotcom bust in the early 2000s, the Great Recession and then the coronavirus pandemic. All other times, they’ve opted for 25 basis point reductions as their first move.

That’s not to say that we’re in a recession (growth has still been surprising to the upside). Rather, a half-point cut is the Fed’s “commitment not to get behind,” Powell said.

To consumers, though, the larger cut does little to change the borrowing environment. Interest rates are now back to 2023 levels. Before that, borrowing costs hadn’t topped their new level for over a decade.

9/18/2024, 2:50 p.m. ET

By Greg McBride, CFA, Bankrate chief financial analyst

9/18/2024, 2:45 p.m. ET

By James Royal, principal writer, investing and wealth management

9/18/2024, 2:40 p.m. ET

By Sarah Foster, principal U.S. economy and Federal Reserve reporter

The Fed’s rate cut ushers in a new era for monetary policy and the consumers who plan their finances around it. If you’re wondering what a rate cut means for your finances, here are some steps experts recommend. Spoiler alert, though: A lot of it’s similar to when rates were still at their peak. One interest rate cut, after all, is only taking borrowing costs back to levels last seen in 2023.

9/18/2024, 2:30 p.m. ET

By Sarah Foster, principal U.S. economy and Federal Reserve reporter

Most consumers are probably paying attention to how much the Fed cut interest rates in September.  But officials also released a quarterly update on where they see unemployment, inflation and — perhaps most important — interest rates heading, all the way through 2027. It’s called the “Summary of Economic Projections.”

Here’s what to know from officials’ estimates. Just keep in mind: The future rarely evolves as Fed officials expect, so these projections may change. And as you look through these estimates, remember that interest rates are now in a target range of 4.75-5%, the unemployment rate is 4.2% and inflation (at least by the Fed’s preferred measure) is 2.5%.

9/18/2024, 2:00 p.m. ET

By Sarah Foster, principal U.S. economy and Federal Reserve reporter

And just like that, we have our decision.

9/18/2024, 01:58 p.m. ET

By Mark Hamrick, senior economic analyst

Journalists are gathering for the news conference being held by Chair Jerome Powell. Some are out of the room in the so-called lock-up area where they get the announcement. The rest of us are waiting for the official release here where the news conference begins a-half hour later. It is well attended because of the high interest in this eagerly awaited decision.

9/18/2024, 01:35 p.m. ET

By Jim Royal, principal writer on investing and wealth management

9/18/2024, 01:35 p.m. ET

By Jeff Ostrowski, principal writer, home lending

Mortgage rates have dropped dramatically without the Federal Reserve changing its benchmark rate a single basis point. At 6.31% last week, the benchmark 30-year loan is at its lowest since February 2023, according to Bankrate’s national survey of lenders.

It’s a strong reminder that the Fed doesn’t control mortgage rates. Stll, this shift presents an opportunity for homeowners to consider refinancing, replacing their mortgage with a cheaper one – especially if they happened to lock in their rate a year ago, when rates peaked at 8 percent.

9/18/2024, 01:30 p.m. ET

By Karen Bennett, senior banking reporter

9/18/2024, 01:15 p.m. ET

By Troy Segal, senior editor, home lending

When the Fed changes the federal funds rate, it impacts all sorts of loans, including HELOCs (home equity lines of credit). The fluctuating interest they charge moves in tandem with that benchmark rate – so basically, your monthly HELOC payment will bounce too. Here’s more on how the Federal Reserve affects HELOCs and home equity loans (the HELOC’s fixed-rate cousin) and why, if you plan on getting one of these loans, you should keep an eye on how their rates react following a Fed meeting.

9/18/2024, 01:00 p.m. ET

By Mark Hamrick, senior economic analyst

I’ve attended the Federal Reserve Chair’s news conferences since they began in 2011 (that’s a long time ago!). This one should be well attended since it coincides with a historic shift in policy. There will be a lot of questions. I have a list.

At Bankrate, our commitment is to help people attain their financial goals and to better understand the complexities of the economy and personal finances. My goal is to ask a question that will help our audience navigate these issues and to succeed.

I’m thinking: What do people need to know that Chairman Powell isn’t addressing? He and his colleagues have a strategy for what they want to say. It is our job to ask questions on your behalf.

9/18/2024, 12:45 p.m. ET

By India Davis, editor, credit cards

Like most Americans in 2024, I have more credit card debt than I ever planned. I recently got the opportunity to purchase my first house. Amazing! Though it’s much more expensive than I anticipated, clearing out most of my savings. Unfortunately, life likes surprises, and a few months later, I needed to purchase a new car. I did my best to ensure both large purchases were affordable, but high interest rates undoubtedly stretched my budget. Because of this, my credit card debt, which was once manageable, stopped being the focus and is now an issue.

So, the Fed cutting interest rates is exciting, but I’m not getting my hopes too high yet. More than likely, rates will go down by a quarter or maybe half a point and cause a minimal change to my current payments. However, when I refinance later, any rate cut will make a measurable difference when combined with my good credit score. This cut may also be the start of a trend of rate cuts. We can all hope for pre-pandemic rates, right?

But future cuts are all speculation. For now, I’ll be taking steps to lower my debt with an eye on the bigger picture, including possible financial opportunities

9/18/2024, 12:30 p.m. ET

By Michele Petry, senior editor, home lending

With a rate cut on the horizon, many hopeful homebuyers may be thinking, finally! After such a long stretch of waiting, a cut might seem like a magic bullet to make home purchases more affordable again. But the impact of a single rate cut on the housing market may actually be minimal — and in fact, rates have already come down in anticipation of this meeting’s cut.

9/18/2024, 12:15 p.m. ET

By Lauren Nowacki, senior loans writer

Those waiting for auto loan interest rates to drop might celebrate a Fed rate cut, but a decrease in the benchmark rate may not have the expected impact. Other factors also drive rates, such as bond yields, yield spread and the borrower’s credit score.

Besides that, interest rates aren’t the only barriers to buying a car. Vehicle prices have increased exponentially over the last few years, making it harder to afford a new ride, even if interest rates decline.

To get the best auto deal, borrowers should shop around and consider other ways to save, like buying a fuel-efficient car or cashing in on EV incentives by driving electric. One of the best moves to make is strengthening your credit. The better your score, the better the terms – no matter what rates are doing.

9/18/2024, 12:00 p.m. ET

By Greg McBride, CFA, chief financial analyst

Greg McBride, CFA, joins Schwab Network’s “Futures”

9/18/2024, 11:45 a.m. ET

By Karen Bennett, senior banking reporter

Market watchers anticipate the Fed will cut rates today, and such a move could result in many banks lowering their yields on savings accounts and certificates of deposit (CDs). It’s impossible to predict how soon banks would react to a rate cut — or by how much they’d lower their rates — although the fact is yields on competitive deposit accounts remain historically high at this time.

Locking in an annual percentage yield (APY) now on a fixed-rate CD ensures you’ll earn that same APY until the CD matures, even if the bank starts to lower the going rates on its new CDs. This can be a real boon for savers in a falling-rate environment.

9/18/2024, 11:30 a.m. ET

By Lauren Nowacki, senior loans writer

Though the Fed may be changing rates, current borrowers with federal student loans won’t be impacted. However, if you have private student loans or you plan to borrow in the future, you may be impacted.

Like many types of loans, student loans come with an interest rate that can be affected by the Federal Reserve (the Fed)’s key rate. If you have a variable-rate loan, your payment and overall cost of the loan could go up when the Fed raises rates. On the other hand, you could save money when rates go down.

9/18/2024, 11:15 a.m. ET

By Troy Segal, senior editor on home lending

Well — it’s complicated. The Federal Reserve doesn’t directly set mortgage rates. In fact, fixed-rate mortgages don’t even mirror the Fed’s moves — at least not as directly as other consumer loans do. Still, the central bank’s changes in interest rates do ultimately impact how much borrowing to buy that dream house will cost you.

9/18/2024, 10:51 a.m. ET

By Sarah Foster, principal U.S. economy and Federal Reserve reporter

Federal Open Market Committee (FOMC) meetings — the official rate-setting gatherings that lead to announcements like these — are a two-day event. According to the former Fed officials who I’ve talked to over the years, the first day is majorly reserved for what U.S. central bankers like to call an economic “go-round.” The name pays homage to how Fed governors and regional Fed bank presidents literally go around the room and discuss how they currently view economic and financial conditions. This rundown tees up the rate debate, which is probably happening right now, as you’re reading this.

Overall, Fed officials are likely characterizing the current economy as slowing but not cracking.

9/18/2024, 10:40 a.m. ET

By Mark Hamrick, senior economic analyst

9/18/2024, 10:30 a.m. ET

By Ted Rossman, credit card senior industry analyst

Credit card rates are near record highs and will remain elevated for quite some time

Credit card rates are so high that a quarter-point cut here or a half-point cut there won’t make much difference. The average credit card charges 20.78 percent, just shy of a record set last month. If you make minimum payments toward the average credit card balance ($6,329, according to TransUnion) at 20.78 percent, you’ll be in debt for about 18 years and will owe roughly $9,500 in interest. A quarter-point cut trims that total interest expense by $122 and a half-point lowers it by $244. On a monthly basis, the savings are less than a single cup of coffee.

The Fed is expected to cut rates several times in the months and years to come, and a sustained rate-cutting campaign will bring some relief to credit card borrowers – but it still won’t change all that much. Even if the average credit card rate fell 3 percentage points (a process that could easily take a year or more), the minimum payment math would still be pretty brutal. Making minimum payments toward a debt of $6,329 at 17.78 percent would take more than 17 years to pay off, and it would incur over $8,000 in interest charges.

The best way to use a credit card is to pay in full every month, enabling you to avoid interest and allowing you to take full advantage of rewards programs and other perks. Half of all credit cardholders carry debt from month to month. If you’re among them, don’t be ashamed. Take action. My favorite tip is to sign up for a credit card with a generous 0 percent balance transfer promotion. Some of these deals last as long as 21 months. Working with a reputable nonprofit credit counseling agency is another good option. Or you could take on a side hustle, sell stuff you don’t need or cut your expenses. Whatever you do, do something. Credit card debt isn’t going to go away on its own. It’s probably your highest-cost debt by a wide margin and Fed rate cuts aren’t going to change that.

9/18/2024, 10:15 a.m. ET

By Sarah Foster, principal U.S. economy and Federal Reserve reporter

Bankrate’s Sarah Foster breaks down what’s most important for borrowers and savers surrounding the Fed’s first interest rate cut since 2020.

9/18/2024, 10 a.m. ET

By Andrew Dehan, writer, home lending

Buying a house now is a difficult task for many due to high prices and elevated mortgage rates. Home prices took off during the COVID-19 pandemic and have continued to do so, reaching record highs. At the same time, to combat inflation in the market, the Fed began raising rates — that string of rate hikes was reflected in mortgage rates, putting a home purchase further out of reach for many.

Now that the Fed is poised to start cutting rates, what will happen to the housing market? Are we in for another climb, or a fall that will put our hearts in our throats? (Or, hopefully, somewhere in between?) Here’s what the experts have to say about whether Fed rate cuts will stop the housing market roller coaster:

9/18/2024, 9:45 a.m. ET

By: Sarah Foster, principal U.S. economy and Federal Reserve reporter

The Fed’s work is mind-bendingly complex. Even so, it has a more direct line to your wallet than maybe any other policymaker in Washington, D.C., making it important for consumers to keep an eye on.

When the Fed changes interest rates, though, it’s not as if it goes out to every lender in the U.S. economy and dictates how much they’re allowed to charge someone to borrow money. To put simply, the Fed controls a key benchmark interest rate that acts as a lever for pretty much every other financing cost consumers pay (albeit, mortgages, a little more indirectly), from credit cards and auto loans to personal loans and home equity lines of credit.

9/18/2024, 9:35 a.m. ET

By Jim Royal, principal writer on investing and wealth management

9/18/2024, 9:20 a.m. ET

By: Ted Rossman, senior industry analyst, credit cards

Senior Industry Analyst Ted Rossman joins NYSE-TV

9/18/2024, 9:00 a.m. ET

By: Sarah Foster, principal U.S. economy and Federal Reserve reporter

I’ve been covering the Fed since 2018, and I’ve witnessed a lot of exciting moments. My first assignment was reporting on the Trump administration’s attempts to jawbone U.S. central bankers into cutting interest rates. In 2019, I covered the Fed’s three “insurance” rate cuts after it humbly declared that it had made a mistake and didn’t need to raise interest rates as much as it thought it did post-financial crisis. Oh, and then there was 2020 and the Fed’s go-big-or-go-home efforts to rescue the economy from the devastating coronavirus pandemic.

Yet, none of those events have measured up to how exhilarating it’s felt covering the Fed’s forceful post-pandemic inflation fight. There have been many surprises, a rarity on the Fed beat. Fed watchers will never forget where they were in June 2022, when the Fed pivoted at the last second to raise interest rates by three-quarters of a point, rather than half a point. After all of that, my colleagues and I at Bankrate feel the Fed’s September meeting is going to be the most exciting one in years. The start of new eras (in this case, rate cuts) are always that way. Just ask Taylor Swift.

For the everyday consumers we’re trying to help at Bankrate, the first cut is the least consequential. What matters most is how much, and how quickly, the Fed cuts rates.