The Fed just cut rates. Here’s how to make that move work for your money

Small rate cuts may reduce your savings opportunities more than they will meaningfully alleviate your debt burdens. PM Images/Digital Vision/Getty Images

The Federal Reserve Open Market Committee on Wednesday decided to cut the central bank’s key overnight lending rate by a quarter of a percentage point, its first cut in nine months .

Given the Fed’s dual mandate of keeping inflation in check while maximizing employment, it chose a quarter-point cut in the face of a softening labor market but also “somewhat elevated” inflation , which is still above the Fed’s 2% target rate and rising. In addition, Federal Reserve Chair Jerome Powell said the effects on inflation of the federal government’s tariffs remain uncertain.

Wednesday’s move and any future Fed cuts this year — investors st