CHARLOTTE, N.C. — The Federal Reserve’s steep cut this week may go beyond interest rates.

What You Need To Know

  • Inflation now sits at 2.2% — a good sign the economy is moving in the right direction

  • The Federal Reserve says an inflation rate of 2% is essential for sustainable economic growth

  • This week the reserve slashed interest rates by a half point — the first cut in four years

  • Financial experts like Tony Jackson say the dramatic rate cut will give Americans some wiggle room in every day expenses

“We’re going into the retail season, with Christmas shopping and all of that, and that’s just going to make it a little bit more affordable for people,” said financial expert Tony Jackson, The Real Money Coach.

Adding the half-point rate cut will trickle down to everyday expenses.

“When we start to see grocery prices go down, and those essential things we’re paying for go down, then people feel like, well, maybe I can go out and replace my car now, because I’m not spending as much in the grocery store,” Jackson said.

Many North Carolina car dealerships believe customers won’t be knocking down their doors to buy a new car just yet. But, Jackson said as more cuts are expected, this is a good start. 

Another sector that will see relief is the credit card industry where the average interest rate rose to nearly 28% this week according to Forbes’ weekly credit card rates report, and that relief is welcome as the latest data from the Federal Reserve shows Americans owe more than $1.1 trillion in credit card debt. 

“That doesn’t count the interest on it,” Jackson said. “That’s just the balance.”

The reserve’s latest cut may begin a path for many Americans to get out of debt. 

“It may open it up, so people can start shopping those interest rates,” Jackson said. “So, maybe I can get a cheaper, lower interest rate from this credit company versus the other, and I do a transfer of my balance, so that I can bring those payments down.”

After the Fed's dramatic rate cut, the stock market reacted positively. Thursday, the Dow hit a new record, closing 1.3% higher. The S&P rose 1.7% and the NASDAQ added 2.5%.