Economics
Rate Cuts Need Time to Work Their Way Through the Economy
The housing market is already responding, but some business and consumer borrowers are still struggling to make their payments.
Illustration: Clay Hickson for Bloomberg Businessweek
The Federal Reserve’s decision in September to lower interest rates by a more-than-expected 50 basis points has fanned hopes that additional cuts are coming as inflation slows. That promises relief for households and businesses that have been coping with the highest borrowing costs in decades.
Less clear is how long it will take the benefits of cheaper money to ripple through the whole economy. While some sectors, such as real estate, have felt an immediate impact, others will take longer to see the effects.