NORTH DAKOTA ( KXNET ) — The Federal Reserve cut the benchmark interest rate to help battle inflation.

People have been battling high interest rates in the wake of COVID-19, and this .5% cut is set to impact Americans in many ways.

This large rate cut is the Fed’s first cut in over four years, which reflects the focus of bolstering a slowing job market.

Here’s what the move can mean for anyone with student loans, credit card debt, mortgages, and car loans.

The 20-year key rate has been 5.3%, and the central bank’s action lowered it to 4.8% Inflation peaked at 9.1% in mid-2022 to a low of 2.5% in August , which isn’t far above the Fed’s 2% target.

But how will this impact Americans?

Over time, these rate cuts should lower borrowing costs for mortgages, auto loans, and credit cards, which boosts finances and supports spending. Homeowners can refinance mortgages at lower rates, which helps them save on monthly payments. It even shifts credit card debt to lower-cost personal loans or home equity lines.

Businesses will also have the chance to borrow and invest more.

Senior economist at Lending Tree, Jacob Channel, said that taking action now “might be warranted for some, you shouldn’t feel obligated to completely change up your financial strategy just because rates move lower.”

He added, “Act cautiously and responsibly and don’t make any rash decisions based on a single Fed meeting or economic report.”

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