The Federal Reserve will cut interest rates for the second time this year on Thursday, less than two months after its surprise rate cut in September.

The Fed is expected to cut borrowing costs by 0.25 percentage points, or half the size of its September cut, according to forecasts from economists polled by FactSet. That would bring the federal funds rate — the interest rates banks charge each other to borrow money — to a range of 4.5 percent to 4.75 percent from the current level of 4.75 percent to 5 percent.

With the Federal Reserve’s preferred measure of inflation falling to 2.1% last monthjust outside the Fed’s 2 percent target, the central bank is loosening the brakes it applied when inflation hit a 40-year high during the pandemic. High borrowing costs have made it more expensive to buy everything from houses to cars.

If the Fed cuts interest rates by 0.25 percentage points on Thursday, as forecast, the move will provide some additional relief for consumers, although the initial benefit will be small, experts say. The Fed is expected to continue cutting rates at its next meetings, which could lead to more savings for borrowers.

“Once a few more cuts happen over the next few months, the impact will add up to something that moves the needle for the average person struggling with debt,” Matt Schulz, LendingTree chief credit analyst, said in an email. “For now, however, the effect of these cuts will not be very visible.”

Here’s what you need to know about Thursday’s Fed meeting.

Will the Fed cut interest rates?

Yes, the Fed is expected to cut its benchmark rate by 0.25 percentage points on Thursday, Nov. 7, according to economists polled by FactSet.

“Continued disinflation in prices and wage growth, along with strong productivity growth, should favor a gradual recalibration of Fed policy with a 25 bp rate cut after the election, after an excessive 50 bp “recovery” rate cut bp in September,” noted EY chief economist Gregory Daco. a report dated October 31.

Daco expects the Fed to cut rates by an additional 0.25 percentage points at each meeting through June 2025. That would bring the federal funds rate to 4.4 percent in December and 3.4 percent in June.

What time is the Fed’s rate decision?

The Fed will announce his decision at 2 pm ET on November 7, followed by a press conference with Fed Chairman Jerome Powell at 2:30 pm

The Fed’s next rate decision will be announced on December 18.

How low will rates go in 2024?

The Fed is expected to cut its benchmark rate to a range of 4.25% to 4.5% at its December meeting. That would reflect a total reduction of one percentage point from the pre-September level, when the federal funds rate was at its highest level in more than two decades.

But that doesn’t mean mortgage rates or other borrowing costs will fall to that level, because lenders like mortgage companies and credit card companies make money by charging consumers higher terms than the federal funds rate.

Even so, borrowers should see some relief. Already, credit card rates are slightly lower, though they still remain near record highs, according to Schulz.

“While they will almost certainly continue to decline in the coming months, no one should expect a dramatic reduction in credit card bills anytime soon,” he added. “Unless the Fed dramatically accelerates the pace of its rate cuts, it will be some time before these cuts add up to more than just a few dollars a month coming off your bill.”

Will mortgage rates go down?

Despite the Fed’s September tapering, mortgage rates have risen over the past month, with the average interest rate on a 30-year fixed-rate loan hovering around 6.72 percent, according to Freddie Mac. This is up from a September low of 6.08%.

Even though the Fed’s rate decisions impact mortgage rates, home loan costs are also affected by economic trends such as unemployment. Meanwhile, Treasury yields rose on concerns over rising US debt and the presidential election.

“As long as investors remain concerned about what the future holds, Treasury yields and by extension mortgage rates will have a tough time going down and staying down,” noted Jacob Channel, senior economist at LendingTree.