The U.S. Federal Reserve looks set to cut interest rates at its next meeting on Sept. 16 and 17.

The Consumer Price Index (CPI) measure of inflation increased by 8% in 2022, which was a 40-year high and significantly above the Federal Reserve's target annual increase of 2%. High inflation can be devastating for the economy because it erodes consumers' spending power, and it squeezes profit margins for businesses.

The Fed responded by aggressively hiking the federal funds rate (overnight interest rate), taking it from its pandemic low range of 0% to 0.25% to a two-decade high of 5.25% to 5.5% over an 18-month period, which ended in August 2023. The goal was to slow the economy down, which, in turn, would cool inflation.

Thankfully, it worked. The CPI increased at a much slower rate d

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