𝐅𝐄𝐃 𝐑𝐀𝐓𝐄 𝐂𝐔𝐓 𝐄𝐗𝐏𝐋𝐀𝐈𝐍𝐄𝐃 𝐓𝐎 𝐔𝐍𝐃𝐄𝐑𝐒�
Sylvie Kinkade PCRP
Updated at: 3 hours ago
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When people say “The Fed will cut rates” they’re talking about the USA Federal Reserve lowering interest rates. Interest rates decide how much it costs to borrow money from banks.
If the Fed cuts rates, loans for things like houses, cars or businesses become cheaper.
This often encourages people and companies to borrow and spend more, which can help the economy grow.
On the other hand, lower rates usually mean savings accounts earn less interest, so savers get smaller returns. It can also make the USA dollar weaker, which affects global trade and investments.
In short, a Fed rate cut is meant to boost the economy, but it can also lead to inflation if money flows too freely.
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