Wednesday’s decision brings the Fed’s key rate down to about 3.9%, from about 4.1%. The central bank had cranked its rate to roughly 5.3% in 2023 and 2024 to combat the biggest inflation spike in four decades. Lower rates could, over time, reduce borrowing costs for mortgages, auto loans, and credit cards, as well as for business loans.

Stocks and bonds initially rallied after the central bank cut interest rates on Sept. 17, but began giving up those gains before Federal Reserve Chair Jerome Powell started his post-meeting press conference.

Fed Chair Jerome Powell joined the majority of the FOMC to vote for the quarter-point rate cut at Wednesday's meeting in Washington, DC.

Mortgage rates jump after Fed Chair Powell says a December rate cut's uncertain. Will they drop again and what this could mean for the housing market.

The rate cut could gradually reduce costs for mortgages, credit cards, auto loans, and business borrowing, offering some relief to consumers and companies.

More buyers are turning to adjustable-rate mortgages, which offer lower initial rates than fixed-rate loans. But there are some risks.

Negotiate with your lender. If you have private student loans, you may be able to negotiate a lower interest rate with your lender. This is especially true if you're struggling to keep up with your monthly payments or if you plan to refinance and want to give your lender a chance to match.