Just in time to give Kamala Harris a boost.

The Federal Reserve on Wednesday cut interest rates 50 basis points – or 0.5% – bringing the benchmark rate to 4.75-5%.

CNBC reported:

The Federal Reserve on Wednesday enacted its first interest rate cut since the early days of the Covid pandemic, slicing half a percentage point off benchmark rates in an effort to head off a slowdown in the labor market.

With both the jobs picture and inflation softening, the central bank’s Federal Open Market Committee chose to lower its key overnight borrowing rate by a half percentage point, or 50 basis points, affirming market expectations that had recently shifted from an outlook for a cut half that size.

Outside of the emergency rate cuts during Covid, the last time the FOMC cut by half a point was in 2008 during the global financial crisis.

The decision lowers the federal funds rate to a range between 4.75%-5%. While the rate sets short-term borrowing costs for banks, it spills over into multiple consumer products such as mortgages, auto loans and credit cards.

The fed increased rates 11 times for a total of 550 basis points between between March 2022 to July 2023 to hedge inflation but it didn’t work.

The higher interest rates are now posing a problem for the banking sector and the real estate market.

Silicon Valley Bank, Signature Bank and First Republic Bank collapsed in 2022 after depositors withdrew billions of dollars from the lending institutions.

Federal Reserve Chairman Jerome Powell spoke after the Fed slashed rates by 50 basis points.

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