The Economic Perspective: “Have the Fed’s Rate Cuts Helped?”

I’m Mary Walden, with economist MW, welcoming you to the economic perspective.  Today’s program asks if the Fed’s rate cuts have helped.  Mike, the Federal Reserve has reduced their key interest three times this year, for a total reduction of three quarters of a percentage point.  According to the Fed, these cuts have been done to maintain economic growth and head off a possible recession.  Do economists think they’re helping?

  • I’ll only speak for myself, and I think the answer is yes
  • Help has mainly been for consumers
  • Fed’s rate cuts help keep consumer interest rates, such as mortgage rates, low
  • There is evidence the cuts have helped maintain consumer spending and stimulate activity in some sectors, like home-buying
  • Because consumer spending accounts for 70% of activity in the economy, the consumer is really key to the future
  • As long as consumers spend and are confident, many economists think economic growth will continue
  • I’m MW

And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economics.