Mortgage rates are a bit trickier, says Hamrick. The Fed does not directly set mortgage rates, but cutting the benchmark rate could still impact your mortgage.
Investors typically rush to the relative safety of bonds when the economy falters. As a result, recent lower bond yields have led to substantially lower mortgage rates since the end of 2018. Cutting rates could potentially reverse that, Hamrick says, as it signals an improving economy.'s director of economic research, tells CNBC Make It that other economic factors have more influence on mortgage rates.
"The typical 30-year mortgage rate is responding more to uncertainties on a global stage due to trade war concerns and early stage softening in the economy in general than in the fed funds rate," says Olsen. "But a drop in the fed funds rate will contribute to mortgage rates remaining low into the future."Consumers with home equity lines of credit would also benefit from lower interest rates, while auto loans should not be materially affected by the change.
. Private loan rates might be variable, and therefore could be indirectly influenced by the Fed's decision. If you hold private loans, it could be worth exploring refinancing options if the Fed drops interest rates.A rate cut is typically a "mixed bag" for investors, says Krawcheck. The U.S. is currently in the
, and historically the stock market has always rallied after the first rate cut when the economy isn't in a recession, data shows.
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