What Federal Reserve's sizable half-point rate cut means for consumers

The Federal Reserve just did something that they rarely do, lower interest rates less than 50 days before an election. And while 3% mortgage rates are still a ways away because it was such a limited cut, there remains questions about whether or not there will be any political impacts because of the Fed's decision. The U.S. economy is in good shape. It's growing at a solid pace. Inflation is coming down. Wednesday's interest rate announcement was significant for Wall Street, for Main Street, and potentially for politics. It was only the fourth interest rate change two months before an election since 1990. Each of the previous times, the party controlling the White House lost. The last time was 2008. The Federal Reserve is independent, so they do what the economy needs. Greg McBride is the chief financial analyst at Bankrate. We asked how quickly Americans may see an impact on their lives. The benefit of this initial rate cut is that it's just the first step. We've been in a high interest rate environment, but we're not going back to a low interest rate environment. We're just going to go from high to not as high. McBride says a half percent rate cut will not dramatically change the affordability of a house or a monthly credit card payment right away. Politically, however, there is a chance it could make people feel differently about the economy. The Fed initially raised interest rates because inflation was high. Now they are lowering interest rates because inflation has come down. The reality for households is that even though inflation pressures have moderated, prices are still high. Lower inflation doesn't mean lower prices. It just means prices not going up as fast. Any economic news matters this election because the economy consistently ranks as the top issue on the minds of voters. A Scripps News Ipsos poll found 57 percent of people identified inflation as their top concern this election. Harris and Trump have both reacted differently to the news from the Fed. Former President Trump has previously called the Federal Reserve's actions an indicator that the economy is not doing well. Vice President Harris called it quote, welcome news, but added there is still more work to do. Joe St. George, Scripps News, Washington.