‘We need this. We definitely need it’: Locals want a federal interest rate cut

LINCOLN, Neb. (KLKN) – The cut will be the first one since 2020, which one man who lives in Lincoln, Christopher Olsen, said is long overdue.

“We need this. We definitely need it. The value of a dollar is less than it used to be and so hopefully one day it will come back so we can actually buy stuff with the money we make,” he said.

Olsen was looking to buy a house when rates were even higher than the 5.5% that it stands at now.

“I thought it was nuts looking at a 6% mortgage, and I was actually very fortunate at that time because now I can’t get under 7% and that’s a couple hundred dollars a month,” he said. “The price of eggs, milk, your daily necessities are pretty skyrocketing, so fingers crossed for .5 percent.”

Eric Thompson is a professor of economics at the University of Nebraska-Lincoln and said if the Fed wants to lower rates by a quarter of a point, it would allow the bank to assess the impact before making additional cuts. But, he said, it could take longer to get the rate back to normal.

“Because they are happy with the progress of inflation, prices aren’t rising that quickly anymore and they are also concerned about keeping the economy growing,” he said. “And so that’s why they are lowering rates. The decision about how much to lower them is really just a question of pace.”

Thompson said either way, it might take a while before people see any economic impact.

“The people getting new mortgages will be impacted by the new rates. So it affects a lot of things, it makes its way through the economy,” he said. “Although some have noted, it tends to work slowly with a bit of a lag, so changes they make now might not affect the economy until 6 to 9 months from now.”

The Fed is scheduled to announce the interest rate decision at 1 p.m. Shortly after that, Federal Reserve Chairman, Jerome Powell is expected to talk about the central bank’s economic outlook.