BISMARCK, N.D. (KFYR) – Local financial advisors say the slowdown in spending across the country led to the Federal Reserve’s decision to cut interest rates Wednesday.
The Fed knocked off half a percentage point, which might not seem like a lot after watching rates climb higher for so long. Plus, recent jobs reports have shown the economy is cooling.
But, financial advisors say the rate cut proves the Fed thinks we’re at a point where we can safely lower interest rates to stimulate spending without raising inflation again.
“It signals that they have inflation, or they think they have inflation, under control. That’s a good thing. It’s also good for people who have been waiting to make those purchases. It’s a bad thing, though, for the people that are enjoying the higher interest rates you’re getting on your savings accounts, CDs or other fixed investments,” said David Wald.
Wald said it also signals the economy is slowing, which might have unrealized negative impacts on various industries. He said he believes future rate cuts or increases will be more data-dependent than before.
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