Podcast: How Will the Federal Reserve Rate Cuts Affect You?
A pair of School of Business faculty members weigh in on the impacts of the fed’s first slashes since the pandemic.
In an effort to fight inflation and protect the job market, the U.S. Federal Reserve central bank on Sept. 18 announced it was cutting interest rates by half a percentage point. This was noteworthy as it represents the first rate cut since 2020, and it is not expected to be the last.
They expect borrowing costs to drop by another half point this year and full point in 2025, making it cheaper to get loans, finance businesses and many more implications for day-to-day life in America.
In this episode of The Nexus podcast, we talk to Davinder “D.K.” Malhotra, professor of finance in the School of Business and director of the University’s MBA programs, and associate professor of finance Tim Mooney about the importance of the rate cuts—both current and upcoming—particularly what it will mean for students and alumni today and in the future.
“The reason interest rates are declining is because inflation has come down. Keeping inflation low can impact students and everyday consumers a lot because (they) spend a higher proportion of their income on necessities like groceries, housing and even basic health care,” Mooney says. “High inflation has a disproportionately negative impact on students and the everyday consumer.”
