The Federal Reserve made a decision to cut interest rates today. Here you can see the impact on your money.

The Federal Reserve made its decision on Thursday second interest rate cut this yearThe decision came less than two months after the central bank's surprise jumbo cut in September.

According to its statement on Thursday, the Fed cut borrowing costs by 0.25 percentage points, half of its September cut. As a result, the federal funds rate – the interest rates banks charge each other to borrow money – will drop to 4.5% to 4.75% from the current 4.75% to 5%.

Using the Federal Reserve's preferred measure of inflation fell to 2.1% last monthjust shy of 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 borrowing costs have made buying houses and cars more expensive.

The Fed's 0.25 percentage point rate cut will provide some additional relief to consumers, although the initial benefit will be small, experts say. The Fed is expected to cut interest rates further at its next meetings, which could lead to greater savings for borrowers.

“Once a few more cuts are made over the next few months, the impact will add up to something that will move the average person struggling with debt,” Matt Schulz, chief credit analyst at LendingTree, said in a statement E-mail. “However, the effect of these cuts will not be very noticeable for the time being.”

Here's what you should know about Thursday's Fed meeting.

When will the Fed's interest rate decision be made?

The Fed announced its decision on November 7 at 2:00 p.m. ET. There will then be a press conference with Fed Chairman Jerome Powell at 2:30 p.m

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

What impact will the election have on the Fed's decision?

The Nov. 7 meeting will be the Fed's first rate decision since the Nov. 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 shied away from direct comments on White House administrations. Instead, he emphasized the central bank's independence and that its officials make decisions based on data rather than politics.

Still, Trump's policies could complicate the Fed's job, as the president-elect's combination of tariffs, tax cuts and mass deportations of undocumented immigrants is expected to drive up prices by as much as 100 percent 1 percentage point at a time when inflation is close to the Fed's target of a 2% annual rate.

Should Trump's policies spur inflation again, the Fed would find it difficult to further reduce borrowing costs and could instead be forced to raise interest rates to counteract these inflationary pressures.

How low will interest rates be in 2024?

The Fed is expected to cut its key interest rate to a range of 4.25% to 4.5% at its December meeting. That would represent a full percentage point cut from pre-September levels, when the key interest rate hit its highest level in more than two decades.

But that doesn't mean mortgage rates or other borrowing costs will fall to that level, because lenders like mortgage lenders and credit card companies make money by charging consumers higher rates than the federal funds rate.

Still, borrowers should feel some relief. According to Schulz, credit card fees have already fallen slightly, but are still near record highs.

“While they will almost certainly continue to decline in the coming months, no one should expect dramatically reduced credit card bills any time soon,” he added. “Unless the Fed dramatically accelerates its rate cuts, it will be a while before these cuts have an impact of more than just a few dollars per month.”

Will mortgage rates go down?

Despite the Fed cutting interest rates in September Mortgage rates have increased According to Freddie Mac, the average interest rate on a 30-year fixed-rate loan was about 6.72% last month. That's up from September's low of 6.08%.

Although the Fed's interest rate decisions affect mortgage rates, the cost of home financing is also influenced by economic trends such as unemployment. Meanwhile, Treasury yields rose on concerns about rising U.S. debt and the presidential election.

“As long as investors worry about what the future might hold, Treasury yields, and therefore mortgage rates, will be hard-pressed to fall and stay low,” noted Jacob Channel, senior economist at LendingTree.