Kareen MillsFounder & CEO, Friendsgiving Live® · Most Influential Filipina ’23 🏆 Founder of the World’s Largest Friendsgiving Festival for Women | Angel | Keynote | Sugar Mommy™ Media | Psalm 25:1 ✞

Breaking news! Feds just cut rates! #shortterm #longterm

18 Dec 2024 · 1 min

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1:01

In this brief financial news segment, the host announces that the Federal Reserve has cut its benchmark interest rate by a quarter point and outlines the Fed’s plan to scale back further cuts in 2025, with three additional reductions slated for that year. The host then clarifies how this policy move affects consumers: the cut immediately influences short‑term borrowing (loans with maturities under 12 months) but does not directly lower rates on long‑term borrowing such as mortgages, which typically have terms longer than a year. While long‑term rates may eventually adjust as market conditions evolve, the immediate effect is confined to short‑term credit costs. The segment emphasizes the distinction between short‑ and long‑term borrowing and cautions viewers against assuming their mortgage rates will drop right away.

Chapters

Let me interrupt your day with the breaking news. The Fed's just cut the rates by a quarter point. It scales back cuts for 2025, and there are 3 more cuts for 2025. What does this mean to you and your money? Okay, rule number 1, just because the Fed's cut the rates doesn't mean you run to your mortgage lender and say the rates just went down. It does not affect your long-term borrowing. It has immediate effect on your short-term borrowing. What is short-term borrowing versus long-term borrowing? Thought you'd never ask. Short-term borrowing is anything under 12 months, and long-term borrowing is anything over 12 months. Although there's always an aftermath shortly after the Fed cuts rates that affects your long-term borrowing, but it's not directly related to that. Keep that in