Live updates: Fed expected to cut interest rates for the first time in four years

Traders in the two- and five-year options market on the Chicago Board of Trade place orders in Chicago, Illinois, Tuesday, Sept. 18, 2007. The Federal Reserve cut its benchmark interest rate by half a percentage point to 4.75 percent, the first cut in four years, in hopes of saving the U.S. from a recession triggered by the fallout from the housing market collapse.

It's September 18th, and the Federal Reserve will announce at 2 p.m. ET that it is cutting interest rates for the first time in a long time.

This exact situation has happened before. On September 18, 2007, the Fed cut interest rates by half a percentage point to address the turmoil in the housing market. There was also great uncertainty as to whether the Fed would cut interest rates by a quarter of a percentage point or half a percentage point – just like now.

But of course, the economic situation today is very different from what it was 17 years ago. The Fed's rate cut in September 2007 came just months before the Great Recession, when foreclosures on new mortgages began to rise and the labor market also showed worrying signs of weakness.

The situation is not as dire today as it was then. The American housing market is battling an acute affordability crisis, but there is no subprime mortgage problem threatening the country's financial system. And yes, the labor market has slowed over the past year, but job growth remains healthy and unemployment is still at historic lows. In July and August 2007, the U.S. economy lost jobs for the first time in four years.

After the Fed cut interest rates by half a percentage point in September 2007, stock prices shot up; the Dow rose 2.5 percent and the S&P 500 gained almost three percent.