Federal Reserve Signals Potential Interest Rate Cut in September

The Federal Reserve announced it will keep interest rates unchanged for now but highlighted positive progress on inflation, suggesting a rate cut could come in September. This potential move would be the first since the pandemic, with the aim to lower borrowing costs on mortgages, auto loans, and credit cards. The Fed emphasized that their decisions are based solely on economic data, not political pressures. The labor market is also showing signs of cooling, easing inflationary pressures. However, economists agree that a quarter-point rate cut in September and possibly in December would be needed before average consumers notice significant impacts. Immediate effects might be seen on credit card interest rates, while other forms of borrowing could take longer to reflect changes. It's a delicate balancing act for the Fed to maintain low inflation while still supporting a strong job market.