Today, the Fed reduced its benchmark rate by 25 basis points (0.25 percentage points), bringing the federal funds rate range to 4.00% – 4.25%.
Background: Federal funds rate is set by the Federal Open Market Committee. It is the rate at which commercial banks borrow and lend their excess reserves to one another overnight. Mortgage rates do not directly track the Fed, but are largely tied to Treasury yields and the economy.
Who benefits? Borrowers with variable-rate (APR) loans or other forms of credit obligations will see a reduction in their interest rate almost immediately.
Who does not? Borrowers with fixed rate loans and people who invest i.e., lowe