What the Fed’s rate cut means for you

The Federal Reserve has cut its benchmark interest rate again, big news for the U.S. economy but something that will likely have a muted impact on Americans’ personal finances, experts say.

That’s because the reduction doesn’t offset the increases of recent years. And as the key rate creeps closer to zero, financial institutions are less eager to pass borrowing benefits along. Lower rates could also further dampen the perks of savings.

As a reminder, the Fed slashed its benchmark rate — which affects a host of consumer and business loans — to near zero during the recession and kept it there until 2015. Then, as the economy improved, it raised rates several times. Now it has lowered them twice in one year, despite a fairly healthy economy, due to concerns about slowing economic growth and global trade tensions.

The central bank on Wednesday reduced its key rate by a quarter-point to a range of 1.75% to 2% and said it’s prepared to do what it deems necessary to sustain the U.S. economic expansion.

Here’s how the latest move may play out for consumers: