How to make the Fed rate cut work for you

(CNN) —& High interest rates have begun their initial descent.The Federal Reserve on Wednesday announced it would cut its key overnight lending rate by& half a percentage point& — aka 50 basis points — marking the first time the US central bank has lowered rates since March 2020.It is expected to continue cutting rates over the next year or two. But Federal Reserve Chairman Jerome Powell said Wednesday the board will “make decisions meeting by meeting based on incoming economic data.” Barring a big economic slowdown, however, further cuts may be smaller (e.g.., a quarter point). Of today’s cut, Powell said, “We made a good strong start — a sign of our confidence that inflation is coming down … on a sustainable basis. I think we’ll go carefully meeting by meeting.”The Fed’s moves will result in lower interest rates on various consumer financial products and interest-bearing accounts. But don’t expect Wednesday’s single cut — or even another moderate cut or two this year — to necessarily drastically alter your financial life in every way.For borrowers, “rates are not going to fall fast enough to bail you out of a bad situation,” said Greg McBride, chief financial analyst at Bankrate.com. “And...