The Federal Reserve is expected to cut interest rates for the second time this year on Thursday, with the decision coming less than two months after September’s surprise jumbo cut.

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

Using the Federal Reserve’s preferred inflation measure fell to 2.1% last monthjust below the Fed’s 2% target, the central bank is easing the brakes it applied when inflation hit a 40-year high during the pandemic. High financing costs have made it more expensive to buy everything from houses to cars.

If the Fed cuts rates by 0.25 percentage points on Thursday as forecast, the move will provide some additional relief to 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 bigger savings for borrowers.

“If a few more cuts happen in the coming months, the impact will add up to something that moves the average person struggling with debt,” Matt Schulz, chief credit analyst at LendingTree, said in an email. “For the time being, however, the effect of these cuts will not be very noticeable.”

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

Will the Fed cut interest rates?

Yes, according to economists surveyed by FactSet, the Fed is expected to cut its policy rate by 0.25 percentage points on Thursday, November 7.

“Ongoing disinflation in price and wage growth, together with strong productivity growth, should encourage a gradual recalibration of Fed policy, with a 25 basis point rate cut after the elections, following an excessive 50 basis point ‘catch-up’ rate cut in September ,” said Gregory Daco, EY chief economist. a report dated October 31.

Daco expects the Fed to cut rates by another 0.25 percentage point at each meeting through June 2025. That will put the Fed Funds rate at 4.4% in December and 3.4% in June.

What time is the Fed’s interest rate decision?

The Fed will announce its decision on November 7 at 2:00 PM Dutch time, followed by a press conference with Fed Chairman Jerome Powell at 2:30 PM.

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

How will the election impact the Fed’s decision?

The November 7 meeting is the Fed’s first interest rate decision since the November 5 election President Donald Trump to victory.

Although Federal Reserve Chairman Jerome Powell will likely be asked about the potential impact of Trump’s policies on monetary policy and the economy during today’s press conference, Powell generally shies away from direct comment on White House administrations. Instead, he has emphasized the central bank’s independence and that its officials make their decisions based on data, not politics.

Still, Trump’s policies could make the Fed’s job more difficult, given that the president-elect’s combination of tariffs, tax cuts and mass deportation of undocumented immigrants is expected to push up prices by as much as 10%. 1 percentage point at a time when inflation is close to the Fed’s target of a 2% annual interest rate.

If Trump’s policies reignite inflation, the Fed would struggle to further reduce borrowing costs and could instead be forced to raise rates to counter those inflationary pressures.

How low will rates be in 2024?

The Fed is expected to cut its policy rate to a range of 4.25% to 4.5% at its December meeting. That would reflect a full percentage point reduction from pre-September levels, 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 drop to that level, as lenders such as mortgage companies and credit card companies make money by charging consumers higher terms than the federal funds rate.

Still, borrowers should see some relief. Credit card rates are already slightly lower, although they are still close to record highs, according to Schulz.

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

Will mortgage rates fall?

Despite the Fed’s rate cut in September, mortgage rates have risen over the past month, with the average rate on a 30-year fixed-rate loan at about 6.72%, according to Freddie Mac. That’s an increase from a low of 6.08% in September.

While the Fed’s interest rate decisions affect mortgage rates, home loan costs are also affected by economic trends such as unemployment. Meanwhile, Treasury yields have risen on concerns about rising U.S. debt and the presidential election.

“As long as investors continue to worry about what the future holds, Treasury yields, and by extension mortgage rates, will have a hard time falling and staying low,” said Jacob Channel, senior economist at LendingTree.