What the Federal Reserve Rate Cut Means for Your Money

Lower mortgage rates, cheaper borrowing costs, and smaller returns on savings could be some of the effects of the Fed’s decision.

Federal Reserve Chairman Jerome Powell speaks after the Federal Open Market Committee meeting at the Federal Reserve in Washington on Dec. 10, 2025. Chip Somodevilla/Getty Images

The Federal Reserve cut interest rates at the final meeting of the year, and this third straight rate reduction will affect your money.

Central bankers voted 9–3 on Dec. 10 to lower the benchmark federal funds rate—a key policy rate that influences business, household, and government borrowing costs—by a quarter point.