The Federal Reserve will cut interest rates on Thursday. Here’s the impact on your money.

The Federal Reserve is expected to cut interest rates for the second time this year on Thursday, and the decision comes less than two months after its surprise jumbo cut in September.

The Fed is expected to shave borrowing costs by 0.25 percentage points, or half the size of the reduction in September, according to forecasts from economists polled by FactSet. That would bring the federal funds rate — the rate banks charge each other to lend money — down to a range of 4.5% to 4.75% from its current level of 4.75% to 5%.

With the Federal Reserve’s preferred inflation target fell to 2.1% last monthjust shy of the Fed’s 2% target, the central bank is loosening the brakes it used when inflation hit a 40-year high during the pandemic. High borrowing costs have made it more expensive to buy everything from homes to cars.

If the Fed cuts interest rates by 0.25 percentage points on Thursday as predicted, the move will provide some additional relief for consumers, although the initial benefit will be small, experts say. The Fed is expected to continue cutting interest rates at its next several meetings, which could snowball into bigger savings for borrowers.

“When a few cuts happen over the next few months, the impact will add up to something that moves the needle for the average person struggling with debt,” Matt Schulz, LendingTree chief credit analyst, said in an email. “At the moment, however, the effect of these cuts will not be very noticeable.”

Here’s what you need to know about Thursday’s Fed meeting.

Will the Fed cut interest rates?

Yes, the Fed is expected to shave its benchmark interest rate by 0.25 percentage points on Thursday, Nov. 7, according to economists polled by FactSet.

“Continued price and wage growth disinflation, together with strong productivity growth, should encourage a gradual recalibration of Fed policy with a post-election 25bps rate cut following an excessive 50bps ‘catch-up’ rate in September,” noted EY chief economist Gregory Daco in a report dated 31 . October.

Daco expects the Fed to cut rates by another 0.25 percentage points at each meeting through June 2025. That would bring the federal funds rate to 4.4% in December and 3.4% in June.

What time is the Fed’s interest rate decision?

Fed will advertise its decision at 2 p.m. ET on November 7, followed by a press conference with Fed Chairman Jerome Powell at 2:30 p.m

The next Fed interest rate decision will be announced on December 18.

How low will interest rates go in 2024?

The Fed is expected to cut its benchmark interest rate to a range of 4.25% to 4.5% at its December meeting. That would reflect a full percentage point reduction from pre-September levels, when the federal funds rate was at its highest in more than two decades.

But that doesn’t mean mortgage rates or other borrowing costs will drop to that level, since lenders like mortgage companies and credit card companies make money by charging consumers higher terms than the federal funds rate.

Still, borrowers should see some relief. Already, credit card rates are slightly lower, though still near record highs, according to Schulz.

“While they will almost certainly continue to decline in the coming months, no one should expect dramatically reduced credit card bills anytime soon,” he added. “Unless the Fed dramatically accelerates its pace of rate cuts, it will still be a while before those reductions add up to more than just a few dollars a month coming off your bill.”

Are interest rates on mortgages falling?

Despite the Fed’s September cut, mortgage rates have risen over the past month, with the average rate on a 30-year fixed-rate loan hovering around 6.72%, according to Freddie Mac. That’s up from a September low of 6.08%.

Although the Fed’s interest rate decisions affect mortgage rates, home loan costs are also affected by economic trends such as unemployment. Meanwhile, Treasury yields have been rising due to concerns about rising US debt and the presidential election.

“As long as investors remain concerned about what the future may hold, Treasuries are yielding and, by extension, mortgage rates will have a tough time falling and staying low,” noted Jacob Channel, senior economist at LendingTree.