Don't expect 'immediate relief' from the Federal Reserve's first rate cut in years, economist says. Here's why

Consumers should feel good about [an interest rate reduction] but it's not going to deliver sizeable immediate relief," said Brett House, economics professor at Columbia Business School.

The cumulative progress on inflation evidenced by the CPI now at 2.5% after having peaked at 9% in mid-2022 has given the Federal Reserve the green light to begin cutting interest rates at next week's meeting," said Greg McBride, chief financial analyst at Bankrate.com.

What borrowers can be optimistic about is that we will see a series of rate cuts that cumulatively will have a meaningful impact on borrowing costs, but it will take time," he said. "One rate cut is not going to be a panacea."

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