Federal Reserve expected to cut interest rates for first time since December

For the first time since December, the Federal Reserve is widely expected to lower interest rates today.

(CNN)- For the first time since December, the Federal Reserve is widely expected to lower interest rates today, with analysts predicting at least a quarter-point drop. Such a move would bring the target federal funds rate down to between 4 and 4.25 percent, making it cheaper for consumers to borrow money.

“They set the price and supply of money that literally affects how much we pay for our mortgage, our credit card, our auto loan, and it affects really the entire base of business,” said Rohit Chopra, former director of the Consumer Financial Protection Bureau.

The rate decision comes as FICO reports the sharpest drop in credit scores since the Great Recession, a trend that could make borrowing more expensive for many Americans despite the expected cut.

“The higher the score, the cheaper it is to borrow and vice versa,” explained CNN business reporter Matt Egan. “Lower scores make it more expensive to borrow.”

Economists caution that while lower rates can ease debt burdens, they can also fuel inflation — already being driven higher by tariffs.

“Things are gonna cost more in the grocery store,” said Michelle Singletary, personal finance columnist for The Washington Post. “Your BLT is gonna be like bacon and lettuce, because tomatoes are up.”

The Fed’s decision will also ripple across savings yields, certificates of deposit, and even retirement funds tied to the stock market.

“They will indicate what we call a loosening bias or an easing bias, but they won’t commit ahead of time to future cuts,” said Adam Posen, president of the Peterson Institute for International Economics. “And I think the markets may react a little negatively to that.”