The Federal Reserve Board once again cut a key interest rate at its meeting today, April 30. The Fed lowered its target for the federal funds rate by 25 basis points to 2.00 percent. The federal funds rate is the rate consumers pay on credit cards, home equity lines of credit and automobile loans.
Today’s cut was the seventh rate reduction in the past seven months. As the central bank continues to allay fears of a U.S. economic recession, it also has the challenge of keeping a watchful eye on inflation. The Fed’s statement included the comment that “uncertainty about the inflation outlook remains high.” This comment has many experts believing the Fed may be done cutting rates for now as it directs its attention toward inflation and away from the economic slowdown.
The federal funds rate is an overnight bank lending rate that affects rates on various types of loans such as variable-rate mortgages and credit card rates, among others. The rate may also impact rates on various investment and insurance products offered by life insurance companies.